Hi alumina1. Thanks again for putting the numbers together. I just went through your numbers, and I have a few questions (my apologies if they've been asked/answered earlier and I missed it!):
A - HPA pricing
Orbite is providing HPA pricing at a basked price > $50,000 per tonne in its corporate presentation. I assumed this was a combination of 4N pricing that probably will be < $50,000 per tonne, and an as yet unknown quantity of 5N/6N that will fetch a much higher price, which Orbite suggests may be as high as $250,000 per tonne.
My question for you are HPA revenue in 2013 is twofold:
(i) How confident are you, or what visibility do you have, that Orbite will be capable of producing 6N, and that there will be the demand to offtake 230 tonnes of 6N in 2013?
(ii) How confident are you that Orbite can sell 350 tonnes of 5N at $100,000 per tonne? I haven't seen Orbite provide any numbers/guidance for 5N, so it's a bit of a mystery to me.
I guess when Orbite provides guidance that there HPA basket will be priced at > $50,000 per tonne, it sort of depends on how much greater the price will be (smile).
B - 2013 HPA production volumes
Just a quick comment - reaching 5 tpd production from the HPA facility by September would really be great. Do you feel this is a reasonable assumption given your discussion with Orbite?
C - HP-Silica
Orbite has been pretty quiet on its forecasts for HP-silica since it press-released the development of its HP-silica process. There's no mention of it, I don't believe, in their corporate presentation. In the press release, it announces that Orbite has achieved 3N silica, with a "conceptual basis" to achieve 5N to 7N.
My question here is: How confident are you that Orbite will be producing 4N and 5N silica, and that the demand for the product is there for the prices you quote?
D - In Summary
Thanks for the reply alumina1, and the numbers you provide for higher-purity levels of HPA and silica are very enticing. Because I haven't heard Orbite guide to revenues and purities at the upper of of what you suggest, I think it's safest to use more conservative numbers. However, if you've spoken with the company, and can confirm otherwise, I'd be extremely happy to update my expecations!