interesting development , page-3

I should have elaborated earlier Herebus, however was short of time.

Matmor uses Coldry which is much cheaper than coking coal as well as low quality iron ore (30% Fe as opposed to 65%+). Savings are also derived from reduced energy consumption/pollution (carbon credits) via the Matmor process.

The Chinese strategy to buy into/buy out resource plays is limited to smaller companies. IMO it will not happen with either RIO or BHP. Too many political/geopolitical ramifications. It seems the Chinese have adopted a path of least resistance. Buying into RIO and if you believe the latest whispers, BHP, will help them offset some of the increase in commodity prices via returns from their investments. It’s their way of making something out of a lose/lose situation. To manipulate prices down via the acquisition of small/midcap resource Co's would be akin to saying electricity prices will fall due to green energy sources(wind, solar) replacing base load power supply ( nuclear/coal). Buying a small/mid coal, iron ore Co outright is really averaging down their costs. Minimising the damage. The old strategy of one hand giveth, the other hand taketh.

Steelmakers, Arcelor/Mittal, Nippon Steel, POSCO, and BOASTEEL, to name a few, will be actively seeking ways to reduce input costs, even reconfiguring their processes if need be and/or setting up new revolutionary steel making plants (MATMOR). Could you imagine how much more cars, white goods, construction etc would cost if coal and steel continue to rise on the same trajectory to date? Even if supply somehow meets demand at a future date, it would be offset by diminishing cheap labour. Its imperative for the steel makers, at the very least, to maintain their profit margins without negatively effecting demand and increase volumes. First mover advantage to adopt new technology will be crucial.


ESI's latest announcement states the CO. is confident MATMOR can begin commercialisation over the next 12 months.

Some would say that that it will be sometime before any benefit is derived. Maybe, maybe not. COLDRY was in its very early stages, pre-pilot plant when it signed the 20MTPA deal with the Indians. Same could happen with MATMOR. Supply COLDRY pellets to steelmaker/s and clip a royalty for MATMOR.

ESI management’s confidence and excitement is not without foundation!

If you care to delve further, SLX offers a comparison path that ESI could well follow.

In 2005 US Companies were given the green light from the US Gov to proceed with due diligence on SLX's technology (Uranium enrichment). In 2006 SLX signs Commercialisation & License Agreement (Development program) with G.E. that would lead to a sign on fee of $5 Mill with additional milestone payments thereafter, leading to a 7p/c royalty fee. Its market cap within a year of that agreement peaked at $1.7 BILLION ($12.90 per share) and still 5 years away from commercialisation (2012). The market liked the story and continues to do so even though it has eased from its lofty heights (Uranium bull market)....... (Currently $7.27, appx 1 BILLION M/C)

Cheers
RBA