OTCPK:KATFF - Post by User
Comment by
jiayouhaon Jul 04, 2018 1:20pm
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Post# 28267903
RE:RE:trade war plays a big role
RE:RE:trade war plays a big roleInternalAudit68 wrote: I think it partly depends how the off-take arrangement between KAT and GLEN are structured because the latter takes 100% of KAT's cobalt and copper production. If by market price, the LME price is what is followed, then it's not so good for KAT since GLEN may be selling the goods at far higher prices than the LME pricing dictates.
But if the market price is based somehow on the contract price struck by GLEN, then it will likely be above the LME pricing, which will bode well for KAT.
Maybe topdop has some insight on this off-take agreement?
I agree with you. My old concern was that Glencore might significantly reduce the purchasing price for goods from KAT and sell them at high (market price). By doing so, they will seize majority of profit from price appreciation and interest pmt, leaving less profit to DRC. But I think DRC gov may not allow this happen. And that would also be bad for KAT investors.