Again, the more you say, the worse it is for you.
"Who is going to pay for the cost in the interim?"
Cost of what ?? Freight is NEVER paid in advance.
It's paid when the goods are loaded and shipped - NOT
BEFORE. So again, you are referring to an expense that's
so far in the future that it affects nothing of the company's
prospects until they actually start mining. Anticipating
your next stupid question, IF they sell on a C.I.F. basis,
they will develop their price quote including freight
costs based on the then-prevailing freight rates. So it
will be a self-adjusting, cost-neutral part of the quote.
And BTW, Tek Cominco undoubtably ships millions of tons of
ore per year. There's no question that if Scott Keevil needs
some help in figuring out how to get mined stuff from point
A to point B, he could (yet again) tap into his dad's resources. For that matter, there are probably a dozen Canadian brokers he could easily find. For that matter, I could (still) do it for him. As my old boss (at Marc Rich
Co) used to say: "Ships are like a$$holes; everybody's got
one." This is just not that hard a service to find.
The only (very minor) logistical issue for shipping that they might have to consider: If for some reason they ship out of Ontario somewhere instead of Montreal, they will be limited in size of ship because of the physical restrictions of the St. Lawrence Seaway. I don't remember the exact restrictions, but basically they would be limited to handy size ships (of about 28,000 tons cargo capacity maximum) - this is because of length and beam restrictions on the various locks in the system, and also there is a 26 foot (fresh water - it makes a difference in ship's loading capacity - because FW is less dense than salt water, the ship "sinks" more in FW so you can't ship quite as much if there is a draft restriction - which in the seaway, there's a 26 ft FW draft restriction at Montreal, just before the first lock). But, again, all of this is a very very minor and technical issue, and there are PLENTY of ships that service the Great Lakes during their shipping season, which runs from about April 15th through mid December. (google "Fednav" for one). Plenty of ships available, with lots of space on the "spot" market - nooooo problems. And if they sell FOB, this
doesn't even become an issue.
Another point, freight costs on bulk ships are priced on a "per ton" basis. Even now, in the hottest shipping market in history, freight costs from Great Lakes to China probably wouldn't exceed $100/ton. At a cost of $35 a pound for Niobium (or whatever it is), the additional increment of freight cost won't even be noticed in the pricing. It's maybe a nickel at the most. When raw materials were a lot cheaper, there were some commodities that were freight sensitive. Grains, for one. Scrap steel for another (actually, it's the classic example). In other words, at lower prices, the cost of freight made up a large percentage of the delivered costs of the goods and as such, markets were very sensitive to that cost. At higher commodity prices, this issue fades away. Plus, the demand is much higher and charterers will pay up to secure shipment and deliver (or get delivery of) their required raw materials. Again, this is just an aside to the entire issue of what SRSR will EVENTUALLY have to deal with if they start selling to an overseas buyer in quantity on a CIF basis - has NOTHING to do with "Who is going to pay for the cost in the interim?"
Question for the board - how much (refined) material have we come up with as an estimated amount to be produced and sold in the first couple of years ?? I know the analysis has been done on basis of income, but what are we talking about producing in terms of tonnage, on an annual basis in the beginning of mining operations. Unless it's many, many tens of thousands of tons,
we can easily find shipping capacity to cover any shipment requirements we may have.
Just as aside to the rest of the board, for your information:
Most bulk freight contracts are written with 95% of freight paid within a certain short time of releasing bills of lading to the shipper (usually three days). Some trades have freight paid "before breaking bulk" (i.e., arrival at destination port), but within a few days of sailing is normal. If the freight doesn't get paid for some reason, the owner has a priority lean on the cargo, and they WILL dispose of it and collect the freight. The balance of freight is usually held back until final voyage accounts are rendered (anywhere from 30 to 90 days), and demurrage/despatch calculations are made and final freight accounts are settled.
Again, just to deal directly with the canard of "interim freight costs" - NO freight costs are incurred until you start actually shipping stuff.
Please stop making stupid statements about subjects that you have absolutely no knowledge about (which is just about everything you've commented on so far, near as I can tell).
M78
