We should have been paid, by now.
We shipped the first load out to "the international market," most likely meaning somewhere in Korea or China, on 1 August. The terms were that the price is calculated by a formula involving Fastmarkets Spod spot price, Fastmarkets LiOH monohydrate spot price and the Shanghai spot price for LiOH. Assuming SP5.5 and LiOH of 1.2%, that should work out to roughly $3,200/mt, assuming it's an even split for the three indices (I don't know the precise formula they're using). The 1 August statement from SYA indicates that the shipment was 20,500 mt, so if I'm anywhere near correct, that amounts to $65.6M.
The same statement indicates that within 5 days of the shipment being received (they could have taken the slow boat to China, and should have arrived almost two weeks ago), SYA is to receive "provisional payment," aka, some of the payment price, probably 80%-90% (the end buyer must confirm the LiOH content of the shipment to verify the final payment price and pay-up the balance). Assuming it's a standard 80% payment, that's $52.5M, with another $13.1M to be received in less than a month (could be just a few days, by now).
Unfortunately, our next shipment is going to be to PLL. 30,000 mt to ship in August and September. When they invested in NAL (they own 25%), they also nailed-down a ridiculously generous offtake agreement that allows them half of NAL's production at $960/mt! Since it costs us about $750/mt to produce and ship, we don't make the killing on PLL shipments that we do selling to the spot market. Even at that ridiculously discounted price, the PLL shipment will generate US$28.8M (all my numbers for this post are USD).
The good news is, the PLL offtake agreement ends in 2026, after which we can make them pay something MUCH closer to the market price.
As a sidenote, the 1 August statement indicated that there was already enough concentrate piled at port at the time to fulfill the upcoming PLL order, and as of 1 August, they were already stockpiling for a third delivery, which would again be a spot price load, where we make much more money.
I hope that Mr. Brown is very quick to update the world as to what payments we have received and any other potentially positive news (how much of the first load is paid and when will we receive the balance/has PLL paid anything for the second shipment, since we're now almost a month down the road/do we have timing on Load #3, and estimate of the price we should receive?). The last emporer was VERY poor at communicating, we have a good story, and he and the Board need to dictate the company public profile, lest the Citibanks, UBSs and Marquaries of the World will.
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