The actual number of cases going forward, won't be what drives this. It'll be the fear factor.
The WHO already pushing nations to prepare for a second wave this Winter.
(2/5)
That means mass testing throughout the Summer and that Winter. Whatever the results. Whatever the number of cases. . . because nations/businesses/people, worldwide, will pay to avoid another lock down.
What government having finally been given the capacity to test,
(3/5)
is going to risk not testing big time, in Winter?
What airpor's going to remove testing at the time of year when the most amount of passengers are showing symptoms, be it they could be common colds?
Given what we have been through already, who is going to make that call,
(4/5)
given the cavern of difference in cost between large scale testing and further lock downs and economic stress?
Covid testing isn't just about the perceived realities of the virus. It is about policy and politics.
My logic only.
(5/5)
Now add in the fact that Russia, India, Brazil, Chile, Peru and countless other nations, haven't even peaked yet.
When do we fly to them and they fly to us? Before Winter?
And that is all without a 2nd wave even turning up. Merely the fear attached to it.
1/16
It's difficult to call this market but my view is that assuming no more operational glitches #TGR now steadily re-rates as the operations sign off the various stages to 30ktpa.
2/ Front-end valuations should depend on where graphite prices go but as Syrah demonstrated yesterday (graphite fines not large flake) orders are buoyant.
Forward orders there running at 90,000 tons which are 50% of their current yearly output. So substantial.
3/ Note also Syrah cannot produce for less than FOB C1 $543/t even at 15,000 tons per month output and that's fines.
It is clear after last night's presentation that TGR C1 costs have also risen but this is to be expected in this current market.
1/12
Here are Verde Agritech's expected sales targets for 2022 which were revised in May and offer a significant read across to #HMI and what it can achieve this year and also.
1/9 In a previous #HMI thread, I highlighted that the $600k write-down in the FY2021 accounts meant that trade debtors (so effectively trade receivables) almost doubled between YE 2020 and YE 2021.
1/18
I've been running an extensive exercise on Verde Agritech also a relatively new but expanding fertiliser producer based just c. 70km from #HMI in Minas Gervais in Brazil. The results to date are rather fascinating and certainly worthy of review.
2/ Verde is a TSX-listed producer with a current plant capacity nearly double the size of HMI (0.6Mtpy) but with a phase 2 expansion due to come online in 2023 which would take output to 2.4Mtpy.
So a much bigger operation to come and soon.
3/ Those that remember my 5th July numbers on #HMI sales prices will perhaps remember that they demonstrated a $53.20/t average sale price for 2021.
At the average achieved AUD/BRL for 2021 of 4.054, this equated to an average price of BRL216.
1/7 Based on what I have just talked about if #HMI had received all the monies from its sales in 2021 then this would have amounted to $4.52m and the business would have been profitable at the operating level in 2021.
2/ What's more, the $4.454m paid out in 2021 reflects more accurately the true costs to run the business over the course of one year.
One cannot conclude exactly how much HMI produced in 2021 because the cash receipts reflect payment dates and not when the goods were received.
3/ Inventory was fairly minimal which reflects an operation that leans towards producing to order.
However, the costs associated with administration clearly eat up the vast majority of this with the consolidated statement accounting for c. $3.85m in the period.