RE:RE:RE:RE:RE:Here's the situationI think that we should be honest and admit that we don't really know what is in the agreements governing the smelting of Trevali's ore. There may be clauses governing 'acts of god' or adjustments when the TC spot price diverges greatly from the annual benchmark. When a company is close to bankruptcy there is always room to negotiate, particularly if they stop paying their smelting invoices!
I think that Trevali is so close to being out of cash that they are telling Glencore to renogetiate this years treatment charge rate, or face the loss of their shares in Trevali and likely shut-down (temporary) of their mines. That is not good for either of them. It is a somewhat powerful negotiating position because you have acknowledged that you are close to bankruptcy and thus have little to lose.
The fact is though that they are likely down to only 10-15 million in cash and it is down to a coin flip whether they survive. With LME inventories increasing, and an uncertain zinc demand in the next 12 months, the price of zinc could easily decrease again. Any more COVID-19 closures and zinc will go down, leaving Trevali out of money.
I'm a big fan of Trevali, but they've run head first into a brick wall with COVID-19 and the unfortunate timing of the calcuation of the annual TC benchmark. I just don't see a way out that leaves shareholders with much of anything.