My views:
- Neither will be finalised this quarter.
- Nothing will happen until steady state production at close to nameplate is achieved. And not, we have run the thing for a day and can do it at steady state. Steady state being it is in continuous operation, save for scheduled maintenance downtime and we are stocking up and selling ...
- The team is working towards steady state but I think the bullish by mid-year was an overly optimistic JZ. The "aimed" to be "finalised", as you point out, is a dialling back of expectation. I don't mind this at all, it's hard not to like the guy when he is getting things done earnestly, even if he is sometimes a little too optimistic. It's not a simple task that they are undertaking, so if it's a couple of months later, no big deal, as long as it gets done.
- In the current South American environment (sovereign risk in Chile and others, elections, etc.), no tier 1 institution is going to sign a binding off take and hand over pre-payment to progress expansion until supply can be guaranteed. So, permitting must follow. The recent permitting action for POSCO, which the Salta government was/is involved in, is interesting. Was it the drive of the government of the other province that got it there or was it fact that a bigger player was involved? I found that to be a really interesting development, particularly when you have a local operation, Puna, that is dotting the i's and crossing the t's and doing everything right to inject into the local community and so on... (yep, well aware of the consultation program going on now, of course, something that we had no idea about until recently, when holders got restless about where the permits were)
So for me, the links in the chain are: steady state -> permitting -> tier 1 bonanza (= multiples higher share price)
I also have the tier 1 player speech going around in my mind and I hope the expectations raised on that score was soundly premised. If it was, what's a few months more to wait?
I hope I am completely wrong and the monthly progress announcement next week says: sorry team we are only producing 35t per week, but it is steady state and we can't work out how to turn the machine off, here's a picture of that nice lady from the Salta government with Pablo and JZ, yes that is a picture of the 10kt expansion permit in Pablo's hands, oh, and that funny little guy in the picture with the big smile, sitting on the donkey, is the Mitsubishi boss.
We have been on a long journey, are we there yet? Not long to go..,
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