General Discussion Topics, page-143348

@connejam
CJ that is the $64M question and the simple answer is no one here knows for sure, but we can speculate based on a few things. Your question requires an understanding of

1. It IS NOT SYA that goes into C&M. It the JV (SYQ) that makes the decision to put NAL into C&M. And while SYA owns 75% of SYQ and PLL owns 25%, you need to remember there is a Shareholder Agreement that governs certain aspects of the JV. This was noted at the AGM, I followed up via email on some specifics and while some on this forum like to deny it, there are shareholder minority rights that require - lets just say >75% of the shareholder vote to pass it (in other words both SYA and PLL need to agree). I put C&M in that special resolution requirement.

2. Most agreements will contain what is called "suspension rights", "termination rights" and "force majeure". In my experience, force majeure does not extend to "economics" ... as in I want out of the agreement because I lose money on it ... FM is their to protect you against things truly out of your control ... like Gov't actions e.g the country your mine is in suddenly is added to a "sanctions list". Termination rights are usually a very specific list and then Suspension rights list when the contract is simply suspended.

Now I'm going to reference LIONTOWN and their with LG just to illustrate something



Right there, in LTR's release to the market, they highlight a Material Term being Suspensions Rights when the project is placed on C&M due to commercial reasons.

3. For holders of both SYA and PLL we have 2 OTAs to consider

(a) the OTA between SYQ and PLL ... does it have Suspension rights based on commercial grounds. The answer is I DON'T KNOW but the default position for me is NO. This agreement seems to lack a number of protections so why would it have this specific suspension right. This is the summary of material terms as released to market


Nothing on termination rights or any suspension rights

(b) the OTA between PLL and LG and then between PLL and TSLA



The TSLA OTA is less descriptive.

4. So where does that leave SYA and PLL wrt to SYQ? Methinks TSLA holds the key.
a. If PLL cannot suspend its deliveries to TSLA why would they agree to C&M for NAL
b. SYA cannot unilaterally put NAL into C&M
c. If both SYA & PLL both want out, then I imagine the asset gets sold ... and again obvious buyer is TSLA for pennies on the dollar (predator as intimated by many).

So the answer is clouded because both companies have not put forth those material terms that specifically address the issue (but at least LTR did ... up to a point ... as in whats "commercially reasonable").

Hope that helps you.