Sales were Disappointing
Q2-20
Production = 2,562T = 5,648,000 lbs
Sales = 1,018T = 2,244,000 lbs = a lot less than Q2 Production.
So let’s have a look about Sales.
Starting from May (i.e post G era) our Sales are only recognized at the time of the final delivery (Side note: I have no idea how the contracts are negotiated. Based on the prices at destination?).
We know that 480T (1,058,000 lbs) were produced in April and we can safely assumed that those were sold to G and as before the revenue was recognized right away at the gate thus the Q2 booking of a remeasurement in favour to G of ~$2.4M (Clipper, would you please tell us what the average MBEuro V2O5 prices for April).
And the total May-June production = 2,082T (May = 1,052 and June = 1,030T) was to be sold by Mr Vollant. How many of those were actually sold? Who knows. What we know is that out of a total Sales recognition of 1,018T, 480T were sold under the G contract, and only 538T (= 1,018T - 480T) were sold and delivered under the new contracts to new customers. Now, 538T represents merely ~26% of the May-June production. Repeat: Only ~26% of the May-June production was recognized as sales revenue in Q2.
The Q2 results also indicate that
Vanadium Sales from contracts with customers = $10.8M and Glencore remeasurement = ~$2.4M.
So
The average revenue per pound sold (before taking into account the G re-measurement) = $4.81/lb (= $10.8M / 2.244M lbs)
The average revenue per pound sold (after taking into account the G re-measurement) = $3.72/lb (= $8.4M / 2.244M lbs)
Now let’s compare the above to $6.14/lb which was the average price per lb of V2O5 for Q2 2020 reported in the Financial Statements.
Huge gaps!