The CEO of a company should focus on the optimum performance of the business, not ramping the SP via song-and-dance acts, in my view. Let the numbers in the accounts do the talking, and for that we must wait another year, just as the Prospectus stated. I and others have pointed out that what WAK has achieved bears an astounding resemblance to what Management stated in the Prospectus issued in 2020. WAK is about three months behind schedule, due to Covid-induced delays in commissioning the first K99 plant.
On alternative kaolin plays, I do not follow ATN, but I understand twelve years after it floated it is still in loss-making mode, and burning capital. If an investor expects Andrew Sorrensen to be a clone of Iggy Tan, and make noise, then investing in WAK is the wrong kaolin play. I had invested in WFI, but switched to WAK, precisely because I wanted to invest in a kaolin-linked business, not a kaolin story stock.
By the way, it seems that by developing a 99% purity product via dry-blowing, Management has obviated some of the complexity of traditional wet-processing, which has two purposes – a) beneficiating the ore to a high grade of purity and whiteness; and b) making the slurry-form of the product less viscous as is required in the paper sector. Using K99 kaolin as input to wet-processing obviates task “a”, and task “b” is a simpler further step. I need to confirm this, but I think it separates “a” and “b” to the point that WAK can invest in further K99 plants with greater confidence, and use any K99 plant's osutput as as wet-processing feedstock.
Provided WAK can shift more dry-blown K99 kaolin, WAK can expand plants to suit its market needs and CAPEX capability. When the rail link is reconnected, WAK can switch some capacity to the huge market for wet-processed kaolin required by the paper sector, and which attracts a premium price.
Kaolin for the high-class ceramic sector requires high-whiteness kaolin that is viscous. Kaolin for the paper sector requires high-whiteness kaolin that is fluid (non-viscous), and that viscous-to-fluid step requires treatment via additives. This topic deserves a stand-alone post, plus research to confirm what I suspect – that is, the patented K99 technology that to a degree is specific to the Wickepin ore, is worth much more than folk realise. Until the wet-processing step is added to the existing K99 patents, WAK would be ill advised to blab about it.
WAK Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
