nino9, a short story ...Imagine diamonds, an allotrope of carbon. Your company owns a diamond pipe; however it is a fraction of the grade of nearly all others. You believe it will cost $1555 cwt to mine your diamonds. That’s twice what you would have to pay to buy them from another source; however you see that faceted stones are selling for $9000 cwt to jewelry stores on Bay Street. The $9000-$1555 margin works nicely, at least on paper, so you decide to value-add 100% of your production.
You mine 30 stones, facet them in your special way, give them away to jewelry stores, and ask - how many will they commit to buy?
In the meantime, others establish themselves to buy stones from low-cost sources, facet them such they are indistinguishable from yours, and because those others don’t have to capitalize a mine to procure stones, they can and do offer to sell their faceted product for less.
The jewelry stores on Bay Street see this coming, thank you for the free sample and do not commit to buy your stones. So you re-think your idea and decide it’s better to add value to stones from other sources yourself, after all - it’s one of your core competencies. You hold onto your pipe, because it’s a nice hedge in case source prices rise above your own pipe’s cost of production and amortization.
You test other sources; find one or more that work, and then profit quite nicely until furs replace diamonds in the changing market. You then congratulate yourself for not building a mine with a sole path to success. Your accumulated profit was not eroded by mine payback, standby and closure costs. Instead it might be returned to the shareholders who financed you.
Exchange the carbon allotrope <graphite> for <diamond> and <pipe> for <Coosa> in the above simple story to understand what I believe is the better opportunity in front of Westwater.