Hey all, sent off the following email and got a reply from IP, I will paste mine then the response below:
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Dear Ian,
I thought it would be a good time to try my luck with another email to you, some time after we last spoke (I think just after the co. raised at 26c!)
What a turbulent year for the V market and spot prices! I think the most frustrating thing from an investment perspective is, despite my due diligence researching countless articles and forecasts, is seeing the price of Vanadium down where it is. Articles i have read in the last couple of months alone have even stated there is a supply surplus coming out of China which is exceeding demand, and Niobium substitution is also weighing on the price. I find this quite fascinating as everything pointed to a supply shortfall in the coming years, but perhaps I'm not looking far enough forward.
I do have some questions for you if you are positioned to answer them, I will be extremely grateful:
1. Are you concerned with the current V market, given you are deep in talks with progressing the MOU'S to BOA's? Is the price adversely affecting the company's ability to secure a floor pricing agreement? (I may have to wait a few days to see the answer of this given the recent short extension).
2. Does the high purity product of TMT give you pricing advantages when negotiating with the steel industry? Or does the high purity lend itself more to say the battery sector and VRFBs?
3. Have there been any talks with customers in the battery sector? Is this viable at the moment or is investment in VRFBs still in infancy stages?
4. Do you remain confident that the company will secure financing in line with the originally planned timeline? Given the market conditions at the moment I can only imagine, it must not be easy. I have read people say that the CAPEX is too high and will not succeed, however I've always stuck up for this team and firmly believe everything will fall into place.
5. Lastly, can I just commend management on the preservation of funds in the past couple of quarters. From a shareholder perspective this is really great management, especially at such a tricky time. Are there plans to exercise unlisted options if the price recovers in the next couple of weeks?
I have no doubt you are doing everything you can, and I commend management on delivering everything so far on schedule and the milestones that have been achieved thus far in such a short time period. It is a shame the shareprice & V price is where it is, but I still have faith in the team and the great resource, and still hold both TMT & TMTO.
Many thanks, good luck with negotiations and have a nice Christmas and New year,
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Ian's reply:
As always happy to answer questions within the bounds of our obligations under continuous disclosure and ensuring that we don’t pass any information on to individual shareholders beyond what is already in the public domain.
With regard to the V market and pricing it has indeed been very frustrating, however I believe that the tightness in the vanadium supply - demand balance is starting to have an impact and this should be expected to flow through to the V2O5 price in the next little while. We believe that we are seeing some Chinese steel mill restocking which is resulting in increased VN and FV prices, which should result in a flow through to increased V2O5 prices.
The other interesting piece of information is that China was a net importer of vanadium for the month of October – the first time since 2009! Supply from high cost sources in China such as stone coal has been severely impacted by the price retracing.
On your specific questions:
- Given the stated status of the CNMNC offtake extension it is best that I don’t comment directly on this.
- GVP’s high purity product is expected to provide price advantage for the specialty portion of the market – albeit that the product typically has to be certified to attract the premium pricing and this doesn’t happen until there is commercial production. The benefit of the high purity for the steel industry is that it is a more attractive product for this sector and would be likely to displace lower quality material – so higher certainty of market access.
- We have had multiple conversations with groups in the VRFB sector over the past two years – this sector is looking much healthier now than it was at the price highs of last year and there are some very large consumption numbers being talked about – certainty of supply and purity (as well as price) are key for the VRFB sector.
- We are confident on financing for the project – with engagement with groups like NAIF and some of the larger equipment providers as well as offtakers important in putting the finance package together. The market conditions are certainly challenging but at this stage we haven’t made any formal changes to the timeline.
- Thank you – the TMT Board and Management team is very focused on the timely and capital efficient development of the business as we have firm belief in the opportunity presented by the large scale, high grade, low cost, long life **anintha Vanadium Project. Best that I don’t comment on the unlisted options as there are a large number of holders that I am unable to speak for.
