RE: RE: RE: Posco facility & prospects Biznotstock, again I agree for the most part, with one small exception. I agree it is proof the $35M has not yet been advanced from IMC to Woulfe. I agree that will be the most major single n/r since the offtake agreement was signed back in March.
Where I differ slightly is your definition of "legally binding agreement". A legally binding agreement was signed back in March--that was the offtake agreement. The problem was it had a loop-hole you could drive a Mac truck through--the dd escape clause. IMC could back out of the agreement with no meaningful financial consequence (other than their costs thrown away in doing the dd). This is because there was no significant non-refundable deposit with the initial signing of the offtake. The $5M advanced at that time was a loan with interest, not a deposit. Still, it was a binding agreement, subject to the usual dd escape clause.
In recent weeks we get the n/r from Woulfe claiming IMC has completed their dd and IMC is satisfied. That was a big n/r in my opinion, however, Woulfe had this same song and dance a year earlier when they wrote a n/r saying Korea Zinc had completed their dd and were also satisfied, and we all know how that turned out.
In short, when it comes to offtake agreements, the key ingredient is consideration passing in the form of committed money. By that I mean, when IMC actually pays the $35M, you know they are 100% committed. Once that $35M is advanced, the debt financing from the bank will almost immediately follow thereafter, so the $35M is the key that unlocks the door to the significant de-risking of the project. Once that money is advanced, the building of the plant is a vitural certainty, barring some catestrophic event. Now we have Woulfe's word that the offtake is firmed up. Soon we will have IMC's word in the form of a $35M equity payment. Now that is how binding deals are done. The existing, legally binding agreement, has no teeth until cash consideration is passed. Too many legal loop-holes. I have followed this company every day for over a year now, and I am satisfied that IMC will be advancing the $35M soon-that is why I have put a lot of money in Woulfe shares. I could be wrong. But then again, I could be right and about to make a lot of money with Woulfe over the next year or two. Each must do their own dd.
Biznotstock, it will be a simple process to advance to IMC their share of the Jr shares, but that won't happen until the $35M is actually being advanced. That is just how business works. That is when title passes. It is like buying a house. A legally binding interim agreement is signed, but it has a ton of "subject to" escape clauses such as subject to financing, home inspection, selling some other home, well testing, water testing, etc. It isn't until the big cheque is in the selling lawyer's trust account that you can really say the deal is 100% done, notwithstanding a binding legal agreement existed from the day the interim agreement was signed. Money talks. Here is to hoping we are both right that IMC will be coming through with the $35M soon.