WKT 3.85% 40.5¢ walkabout resources ltd

Of course the BINDING Term Sheets have mechanisms for a follow...

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    Of course the BINDING Term Sheets have mechanisms for a follow up agreement - It is the BINDING Offtake Agreement and it would kick in once the mine is being built and at a point both parties are in acceptance of a delivery timetable which would all be set out in the BINDING Term Sheet.

    The BINDING Term Sheets will have precise terms and conditions, specifications, quantities etc and appropriate clauses that will also have legal recourse if the contained conditions are not met or adhered too by any party.

    The BINDING Term Sheets have agreed mechanisms that at an agreed time and at an agreed pricing structure, determined and modelled by mutually agreed upon source of market pricing, that data will be transposed into a BINDING OFFTAKE AGREEMENT, once there is an agreed line of site to an actual delivery date.

    No company will sign up to a straight up Binding Offtake Agreement with no line of site to a delivery date while they are in the prefunding stage and preconstruction phase especially with potential penalty clauses for non delivery etc.

    More importantly we are not locking in prices today that next year will be considered low today when forecasts indicate upward movements due to industry demand. The pricing mechanisms have been determined in the BINDING Term Sheet that prices and quantities will be determined accordingly 1 month out from delivery and will involve the spot price at the time is just 1 example.

    Buyer and Seller are therefore protected with the agreed pricing model in the BINDING Term Sheet and no one is being disadvantage as the industry demand picks up in the coming years.

    Obviously I or yourself will never read the BINDING Term Sheets as will be commercially confidential and will be (industry) market sensitive.

    HOWEVER until you have an operational mine and actual line of sight to a delivery date, both parties need to protect themselves initially with a Binding Term Sheet.

    Will be very interesting to see how the Graphite Market adapts and evolves in the coming years as other Graphite Operations come online that have far HIGHER Capex and far HIGHER Working Capital requirements in order to make their projects financially viable.

    Any BUYER most certainly will NOT want to sign up to buy product from a Graphite Company and be locked in, who may never become operational and be trapped for years while companies sort out their funding, especially for the HIGH Capex projects.

    Interestingly there are a multitude of agreements out in the Graphite Sector that some Graphite Companies not yet funded or operational have 60 day minimum out clauses and for good reason should the buyer require product to service their end customers.

    Interesting times ahead indeed.
    Having a FIRST into Production ADVANTAGE in the Expandable Graphite Market will most certainly create enquiries and opportunities ; ))

    DYOR - Highly Recommended : ))
 
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