RE:RE:RE:NEWS: SCY successfully completed Master Alloy programHi ARIMA, thanks for your comments. I shall try to clarify my bold statement a bit.
From the latest NR we learned that the MA optimization work involved 3 stages. In hindsight, it was a bit premature back then (July 2019) to suggest: 'SCY can deliver product as Al-Sc 2% master alloy (MA), the form desired by customers', see slide 8 of the IP.
If you study the diagram on slide 8 of the IP, you'll see that 'AlSc Alloy Market development' as well as 'MA product development' both need to be completed in order to take the next step, which is to sign the multi-year offtakes. This makes sense.
So far, so good, I presume.
It's now a fact that the 'MA product development' has completed, wouldn't you agree? And It's true that we don't know the exact status of the 'AlSc Alloy Market development'. However, I'm optimistic that they are in a very late stage of development. Why? In June 2019, GP mentioned that two LOI-partners were ready to sign by the end of the year. The fact that they didn't was due to not having finished the 'MA product development'. Let me try to explain this.
'Offtake agreements' consist of two seperate arrangements:
1. Arrangement involving the ALUMINUM ALLOY MANUFACTURE and SCY (Price, quantity, quality, etc.)
2. Arrangement involving the PRODUCT MANUFACTURE (=LOI partner) and the ALUMINUM ALLOY MANUFACTURE (Price, quantity, quality, etc.)
(One can deduce this form slide 11 of the IP)
From this it's clear that it's not enough to have just the PRODUCT MANUFACTURES on board, ALUMINUM ALLOY MANUFACTURES will only sign if they are 100% convinced that the 2% AlSc MA they get form SCY meets their specifications, which is only now the case.
This is why I believe the offtake agreements will follow shortly.
I would like to conclude with a snippet from GP's most recent inteview (Proactive). Talking about the shareholders (insiders). Andrew: "And supportive?" GP: "Yes, every one Is. They are waiting for us to finish our offtake portfolio and get into production."
But what does it mean to say: 'to finish an offtake portfolio'? IMO:
- to finish = to sign
- offtake portfolio = the existence of probably 4-6 offtake agreements.
Think about this...
So, convinced?
GLTA
ARIMA11 wrote: RE: I think it is safe to say that the offtakes and project construction financing are both waiting on completion of the master alloy trials and optimization work. SCY has to meet the standards set by the Aluminum alloy manufactures.
AllDutch, not sure about the logic here. If the Offtakes were waiting for completion of master alloy trials and optimization work, why even proposed it as a key objective prior completion?
It appears that these are sequential objective and not independent.
The investor presentation (July 2019) page 8 states:
-Customer offtake agreements are final step to FID and financing, prior to construction.
-SCY can deliver product as Al-Sc 2% master alloy (MA), the form desired by customers.
Also page 13,
-Goal is to secure offtake agreements portfolio, as top priority, in 2019.
https://scandiummining.com/site/assets/files/3480/2019-07-scy-cp.pdf