Jackarooz, it's hard to say, because we are in uncharted...

Jackarooz, it's hard to say, because we are in uncharted territory with regards to those potential offtake sizes. My view is that the Chinese are often all smiles and "yes" at the initial stages of negotiations (not just in mining), and essentially have "given in" to whatever the companies wanted in the MOU, just to get a closer look at everything. Then, they take their time and start talking about what they really want. While all the MOU's may have an element of some genuine need from the buyers, I don't believe that their genuine need is actually at the scale at which they've agreed. Were any of them to actually make it to binding, I believe they will be materially different to what was intended in the MOU, and that's if they even make it to a binding stage. SYR's announcement yesterday with regards to binding offtakes of 120,000 tonnes being secured are a big indicator that the final agreements won't be like the MOUs. They have said "offtakes" (plural), totalling 120,000 tonnes. This is substantially below the level of their MOUs (at over 200 ktpa), although I will add that it's still a fantastic outcome if they get that volume, which is nothing to sneeze at. I suspect it will be for lower value product though.

The binding agreements are going to encounter another big issue, which is that they represent such a large portion of production, and the whole funding model relies upon those off-takes. That means the funders are going to scrutinise the buying companies with a fine tooth comb. And if the funder is a non-Chinese bank, then they are going to struggle to accept the Chinese buyers "word" that they will pay that price. I'd suggest that the off-takes won't be worth as much if they are not signed off in conjunction with the potential funders, because those funders are going to want to see some sort of enforceable mechanism in the off-take to force a "take or pay", and that would indicate some level of international credit letters or bank guarantees or something like that. (just like a bank funder not usually accepting a property developers pre-sales as being genuine unless there is a 10% deposit of cash or bank guarantee held).

Lincoln, you raise a good point. I should have said that my comments were relating to flake graphite only. Graphite is a niche product as it is, and vein graphite even more so.