Just received a messgae with an addition from his notes, regarding prospective Silica volumes..........
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TONNAGE
I asked about the lack of exact figures of tonnage to be expected from the silica sites .. ie we don't know how much silica is actually physically in the ground.
The directors don't see this as a hurdle for finalising the deal with Wacker or any other party for that matter.
MHM is not prepared to invest money in an "academic" tonnage estimate until they have a contract for off take.
How does this work? My understanding is there will be a condition with the off take partners regarding tonnage so that in case the tonnage is well below expectations then the off take partners can still pull out.
However, I don't think Wacker or MHM has any real doubts about the prospective tonnage (IMO).
I think the general consensus its that the tonnage is huge, more than enough to satisfy demand (IMO).
However the legal eagles from both MHM and Wacker will naturally be apprehensive to a deal without a minimum tonnage clause (IMO).
Once the contracts are finalised then MHM will invest money into tonnage analysis. However, the directors unilaterally ruled out a scenario where there will not be enough silica in their tenements to feed a smelter
MHM Price at posting:
23.6¢ Sentiment: LT Buy Disclosure: Held
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