KRR Refocus

so.……….the AGM produced many sad and angry faces. And so it should have. We have been told the PFS for the SSM is all that counts all year and now the reason for the PFS has changed.

With the price of Vanadium falling from highs of USD$70 per/kg to USD$16/kg in November some would think this is the cause , but it is not!
And Vanadium has finally reached a stable, marketable value for the EV industry which will now secure its availability and price for use in the EV Industry. Vanadium is about to become of age. [note - even in little old, Tully in FNQ there is an e-Charger for cars.]

Due to economics and the fact we have a multi-mineral resource of major significant value with all the minerals on the USA & Australian Critical minerals list, KRR is able to continue with its SSM Project instead of failing and falling by the wayside like so many of the other mineral players.

While some have been critical in the past of KRR having too many minerals, this time it has come quite possibly to her rescue.

The ability to switch priorities of her minerals has enabled KRR to survive a price downtrend in Vanadium which other players could not.
She will still produce Vanadium [correct ?] but the main income earner will now be HPA 4N/5N with Vanadium playing as a support mineral.

There has been a REFOCUS of the priority mineral list for the SSM Project, away from Vanadium and focusing on HPA N4/N5 production as the main mineral and revenue earner with Vanadium taking a back seat.
There are many benefits by doing this and really few disadvantages to this refocus.

As has been pointed out the advantages are several - namely

1. No Acid Plant required - cost saving for CAPEX of $300 Mil
2. Simplified circuit with the ability due to Modular design for Vanadium to be be "ramped up" in production if required.
3. High recovery for Alumina
4. Less reagents/acid use for circuits and acid can be shipped in to site.
5. Removes Iron FE from circuit early and aids in "other" recoveries
6. No Acid Plant means better safety on site and less requirements for permits/approvals.
7. Reduced OPEX as acid was the main cost incurred and would have greatly reduced usage.

and most importantly
8. Producing less Vanadium [low price product] but will produce more and better quality HPA [high price product] and a higher Revenue base.

As long term holders and Investors we have been involved with the KRR story for many years, with numerous changes in direction for mining and plant/process design. The PFS has been in progress for perhaps (1) One year? and along with a revised CAPEX and OPEX [several times] has been the holy grail we have been told to wait for with several dates , each being revised and put further out.
This is the disadvantage we will have again with the PFS being put further out for release to March 2010.
But really it is the ONLY disadvantage we will have to face by waiting until March 2010. There will probably be a reduction [already] in the SP while we wait, but as always this is only a paper loss if shares are kept and not sold.

There are also several "other" considerations one should undertake while reviewing the SSM Project and overall KRR.

1. The Vanadium market has seen many attempts to put projects into reality. Some are successful but non are stellar. The interest in Vanadium mining has waned somewhat lately. Too many want to supply this product.
By switching products the SSM has focused on a product we have already proven we can recover in high grades namely HPA N4. A change in the processing route brings even better and cheaper to produce HPA to our capabilities.

2. The switch of product priority means a much cheap CAPEX which when added to the reality of Financing the Project will certainly aid in attracting outside finance whether it be debt financing, JV Partnership or even a special Gov finance
[PEK - Peak resources gets project finance from US Government. ] [note - perhaps TB should talk to Rocky smith CEO PEK who has Washington contacts]

3. The SSM PFS.
Yes the PFS will be drastically different with a much reduced CAPEX and OPEC costs, be more enviro friendly [no acid plant], with a smaller processing circuit.
It would be possible to Finance this SSM Project with debt financing [Dubai Business meetings] without possibly the need of a JV Partner [London & Geneva meetings.]
If financial banks in Dubai agree to a debt loan package would they also possibly invest directly through share placements [here's our CR] enabling us to raise the funds [CR] necessary for the BFS. Conditional loan agreement on an viable BFS for the project being the method of Financing the SSM Project.

So while writing all this out [sorry so long it just had more and more] I have in my own way come to realisation of what my decision is about my considerable holdings in KRR.[ And this is without considering the Gold side at all.]
I will be holding on until the March 2020 PFS is out.
Will there be delays again? I hope not.
For I do take my money seriously and while I know far more about TB than most here, I will not let that distract me from holding him to task which I have not done yet. KRR is not his private company and he must respect those who have supported him and financed this company to date.

As some will suspect TB does read and watch this forum with interest
And know he will know we expect far more from him. Keeping the "peasants" informed has been a big weakness and also a strategy of TB's.
He will need to correct this in the future or suffer the consequences which would be foolhardy at this stage.
A lot of focus by Government & public on corporate accountability these days.

Make what you will of my words, it has helped me and may help you in determining your future with KRR.
As for TB enjoy your Xmas in Geneva, we would like one too please, one day.

Yak52