Thanks for that post. It provided much mental pabulum (food for thought). Americans (and their dictionaries) confuse “pabulum” with “pablum”. Pablum is an insipid baby food made by Meade and Johnson, whereas pabulum is a modern Latin word meaning food, especially a suspension or solution of nutrients in a state suitable for absorption by plants. In Classical Latin "pabulum" was restricted to mean pasture.
I agree with much that you wrote, especially the matter of having a dearth of good quality water. I have always questioned the wisdom of WAK gunning for the paper-coating market, which requires wet processing. I think WAK should stick to dry-blown kaolin, and focus on cost of production to get the optimal delta between cost and revenue. Whether WAK is trying to enter a hostile market with their product positioning, I cannot say. Fibreglass-specific dry-blown kaolin for East Asia may be a very apt positioning for WAK's K99F product.
One of the things that has kept me interested in WAK is the interest shown by Dak Tai Trading's parent company, Stanco Group. Stanco is a large supplier of feedstock to the East Asian glass industry, with a special interest in fibreglass. That alone is a plus, considering the WAK has signed a 10-year distribution agreement with Dak Tai Trading (DTT) that coverts much of East Asia, and specific to fibrerglass. Also, WAK and DTE entered a six-year off-take agreement for 432,000 tonnes of kaolin, of which 271,000 tonnes related to the first three years.
I am always dubious about off-take agreements, because they can have provisions in them that effectively makes them non-contracts. That agreement on its own would not impress me. What does impress me is that before WAK floated in 2020, Stanco had advanced $200,000 to WAK via a promissory note, as recorded in the Prospectus. This has since been followed up by a $1.5m share take-up in the recent capital raising. Why would Stanco do this if it can get dry-float fibreglass-specific kaolin from the USA? WAK has reported that it has sold product at prices that were surprisingly favourable, and better than expected.
I had toyed with the fond notion that WAK's K99F fibreglass-specific product might,being primary kaolin, have less organic contaminant than the alluvial kaolin from Georgia, USA. Although kaolin for fibreglass requires very low levels of organic matter, I think that such contaminants are fairly easily removed, so I still do not understand Stanco's interest in K99F.
Of all industrial minerals, kaolin has the highest level of ore-body specificity. That is, one tends not to find the market, and adjust the kaolin to cusromers' specifications – rather, it is the ore body that defines the optimal specifications to meet, and hence to whom product should be sold.
I have interpreted Stanco's remarkable interest in Wickepin-ore-based kaolin to be significant, but this is based on gut-feel, not knowledge, and hence I regard my investment in WAK as a hunch-based punt.
WAK did not indicate any interest in metakaolin in the Prospectus, and mention of it was made only recently. I have ascribed that low-key interest to the fact that one of WAK's WA-based customers, maybe BCI, inquired if WAK could offer some or other specific metakaolin. If anything emerges from this interest, I suspect it would be limited to the WA market, where WAK has a transport advantage. It may be a potential outlet for kaolin that WAK would otherwise not bother to mine.
