@Inonade and @5ilver..... I am not going to open an account on HotCopper to respond to the ill advised. So you can pass this on....
  • We are in an unprecedented period of inflation for the next few decades (if not more).
  • Those countries that print excessive money will devalue their currency. So in other words a dollar today can buy less tomorrow. But the corollery is also true, what you buy today will be cheaper than if you bought that same item in the future.
  • Because of inflation, the price of all comodities will rise. But not all commodities will increase at the same rate due to the forces of supply and demand.
  • Tungsten is transitioning to a technical metal where future demand is increasing significantly (South Korea investing $400B in Semiconductor and Battery industry, both Tiawan is investing $100B, Intel is investing up to $100B in the semiconductor industry, not to mention countries investing into battery manufacturing plants).
  • Due to relatively few suppliers and the specialized skill to mine tungsten, these are significant barriers to entry into the tungsten mining industry. From this we can conclude the price of tungsten will increase at a higher rate than other metals.
  • The amount of tungsten used in producting the end product is minor i.e. variable costs, which means the price of tunsten could go up 5x and it will have very little impact on the market price of the finished good. Lets say for example 1 MTU of tungsten goes into making a car and costs $300. Lets say the cost of that tungsten rose to $1500, but the price of the car went from $85000 to $150000 so basically the increase price of the car $65000 of which $1200 is attributed to tungsten.
  • Tungsten is a necessary metal, which means that industries that use tungsten in their manufacturing will purchase tungsten at whatever price the market sets.
  • So lets go back to the argument of the cost of building Sangdong going to double to $150M. Lets in fact double that to $300M in todays US dollars. In 10 years time, if inflation devalues the US dollar purchasing power to 1/10 of today's value, then that mine in 10 years time would have cost Almonty $30M in today's dollars. That is the power of Inflation.
  • Back to the original argument of Inflation driving up build costs, those very same Inflationary pressures will also push up the price of tungsten. I further argue that increase demand and short supply will drive up the price of tungsten higher than the rate of Inflation. For example: today's loan is $75M and APT is $300 (it is higher but I am keeping this example simple). Lets say Inflation is 4x so the loan is $300M and APT is $1200 but net demand pushes it higher to $1500. This means that in the future, Almonty will be able to pay off their loan faster than in today's terms.