ZINC - Horsehead Holding Corp

[RadMan24]

What happens when China slows down for a few years. Zinc goes in the tank? A quarter of mines are burning cash. If they finish the plant, they barely generate cash or possibly none at all if zinc collapses. Then zinc recovers, but equity is potentially heavily diluted or wiped out by then. Seems to me that if you are patient you might get this one very cheap. Or you get it with a finished plant trading at 10$.

 

I mean China looks bad. Growth could actually be 0% this year. Long term im still bullish, but short term it could get ugly. They consume 40% of  the worlds zinc. What if they tune down consumption by 15%? Suddenly the world demand for zinc goes down by about 6%. That is huge in terms of demand/supply imbalance. You could see 60-70% price drops that stay that way for a few years. Low cost advantage my ass, everyone is now losing money in that sector (just look at coal).  I would not want to be in a levered commodity stock in the next 2 years. I know I exited all of mine.

 

Looking at history and other commodities, shit can get really ugly if you add debt into the equation. You can be right about zinc demand going up in 10 years time, but if your wrong about the next 2-3 years, your screwed.

 

I have no horse in this race, but if Chinese consumption drops by 15%, that is a catalyst for supply/demand to come into balance and low cost producers to win. The mines that are high cost operators and are levered get taken out as the demand shrinks. The important thing is for the low cost producers to have a strong balance sheet to withstand the pain. Otherwise, possibly their shareholders may get diluted as well in the process as they wait for the balance in prices.

 

ZINC is a low cost producer (in the first quartile), but is its balance sheet strong enough to withstand the collapse in prices without dilution?

yeah but who says they will go off the market quick enough. I agree that a supply drop will happen, but it could be several years before it actually happens. In the mean time who knows where commodity prices could go? If they stay at 40-50c for 2 years, that is going to be painful for ZINC shareholders. That is why i think you might buy this one lower then what it is now at some point with an actual finished plant.

 

And why do people follow pabrai blindly in this thing? That guy had very little successful idea's of his own. He is basically a copy investor.

 

Oh please. Where's the evidence people follow blind--many people got interested as this stock plummeted. Where's the evidence he's had very little success of his own ideas? I guess he got his first $100 million by pure damn luck. Looks like his largest bet on Fiat was a huge mistake, despite the fact its big since he bought it.

 

Let's add some more value, rather than telling everyone that commodity prices are going to tank, after they already have tanked, without looking at a single damn cost curve--except for some crazy scenario that only a miserable bear could come up with. Don't get me started on the difference between coal and zinc. Coal is a completely different animal. If you believe what happened to coal can happen to zinc, then we got problems.

 

 

[zizou]

buyback'?? :o :o :o

 

I hope not.  that would be almost criminally negligent here.  Preserve the cash till they can show they are able to run the plant properly for a couple of quarters at least.  And even then, build a cash reserve, pay off debt..  buybacks should not be on the agenda for potentially years.

 

Mate, I did not say buyback; Mohnish is the only insider buying, it would be good to see management putting their own money into the shares now.

[abitofvalue]

buyback'?? :o :o :o

 

I hope not.  that would be almost criminally negligent here.  Preserve the cash till they can show they are able to run the plant properly for a couple of quarters at least.  And even then, build a cash reserve, pay off debt..  buybacks should not be on the agenda for potentially years.

 

Mate, I did not say buyback; Mohnish is the only insider buying, it would be good to see management putting their own money into the shares now.

 

you are correct. I misread the original comment. 

 

 

[Homestead31]

since people have been talking about equity dilution and pabrai, it is worth noting that Pabrai has commented publicly on ZINC and made it clear that he has a very long term view.  i think it is the recent interview that he and Spier did together where he talks about ZINC in context of 50 years from now there being 100 new mega cities on earth (or something like that - i am paraphrasing) and noting that ZINC will likely be the one of the low cost producers, if not THE low cost producer.

 

based on that statement, i think it is clear that when Pabrai thinks about ZINC, he thinks in terms of "at some point ZINC prices will be up, and at that point ZINC will be worth multiples of its current price."  lets just for argument's sake say that he thinks ZINC will be worth $25 at that point.  It will of course be painful in the short term if they have to do a dilutive equity raise to get Mooresboro operational, but even if there is 25% dilution or so there is still a lot of upside if Pabrai sees it as a 3 or 4 bagger from here.

 

obviously this is not how most people think.  obviously it is very hard to be completely emotionless and ride out that sort of volatility... but that is why Pabrai's returns are as good as they are.

[Liberty]

since people have been talking about equity dilution and pabrai, it is worth noting that Pabrai has commented publicly on ZINC and made it clear that he has a very long term view.  i think it is the recent interview that he and Spier did together where he talks about ZINC in context of 50 years from now there being 100 new mega cities on earth (or something like that - i am paraphrasing) and noting that ZINC will likely be the one of the low cost producers, if not THE low cost producer.

 

based on that statement, i think it is clear that when Pabrai thinks about ZINC, he thinks in terms of "at some point ZINC prices will be up, and at that point ZINC will be worth multiples of its current price."  lets just for argument's sake say that he thinks ZINC will be worth $25 at that point.  It will of course be painful in the short term if they have to do a dilutive equity raise to get Mooresboro operational, but even if there is 25% dilution or so there is still a lot of upside if Pabrai sees it as a 3 or 4 bagger from here.

 

obviously this is not how most people think.  obviously it is very hard to be completely emotionless and ride out that sort of volatility... but that is why Pabrai's returns are as good as they are.

 

Who was making decisions in 1965 based on how things would be in 2015, and how many of these people got it anywhere near right? Even if a longt ime in the future events prove you right, you can get killed in the meantime if commodity prices stay low for years or decades... Opportunity cost is a real thing.

[supertutti]

Damn, I try to invest for the long term but for me that's like 3-5 years, I've never thought about making a return on my investment 50 years down the line. I do agree people aren't following Pabrai into this blindly, there is potential with this company IF they work things out, but for the past few quarters all the excuses seem to be on repeat. For me to get back in to it now, I need to know they've figured out how to operate their plant as planned. Commodity prices will change, but production and management issues are much riskier to bet on in my book.

[Homestead31]

since people have been talking about equity dilution and pabrai, it is worth noting that Pabrai has commented publicly on ZINC and made it clear that he has a very long term view.  i think it is the recent interview that he and Spier did together where he talks about ZINC in context of 50 years from now there being 100 new mega cities on earth (or something like that - i am paraphrasing) and noting that ZINC will likely be the one of the low cost producers, if not THE low cost producer.

 

based on that statement, i think it is clear that when Pabrai thinks about ZINC, he thinks in terms of "at some point ZINC prices will be up, and at that point ZINC will be worth multiples of its current price."  lets just for argument's sake say that he thinks ZINC will be worth $25 at that point.  It will of course be painful in the short term if they have to do a dilutive equity raise to get Mooresboro operational, but even if there is 25% dilution or so there is still a lot of upside if Pabrai sees it as a 3 or 4 bagger from here.

 

obviously this is not how most people think.  obviously it is very hard to be completely emotionless and ride out that sort of volatility... but that is why Pabrai's returns are as good as they are.

 

Who was making decisions in 1965 based on how things would be in 2015, and how many of these people got it anywhere near right? Even if a longt ime in the future events prove you right, you can get killed in the meantime if commodity prices stay low for years or decades... Opportunity cost is a real thing.

 

in 1965.... probably phil fischer... and we know from Berkshire KO story that Warren and Charlie were thinking that way by the mid 80s... and we know that Pabrai is a Buffett follower.  I completely agree that opportunity cost is a real thing - that is why it is so difficult to invest this way... but if you read Buffett and Pabrai they talk about investing in things that are "inevitable."  If you really believe that things are inevitable, and if you have sticky or permanent capital, you can handle a lot of short term opportunity cost if you think the ultimate outcome is a multi bagger.

[Liberty]

since people have been talking about equity dilution and pabrai, it is worth noting that Pabrai has commented publicly on ZINC and made it clear that he has a very long term view.  i think it is the recent interview that he and Spier did together where he talks about ZINC in context of 50 years from now there being 100 new mega cities on earth (or something like that - i am paraphrasing) and noting that ZINC will likely be the one of the low cost producers, if not THE low cost producer.

 

based on that statement, i think it is clear that when Pabrai thinks about ZINC, he thinks in terms of "at some point ZINC prices will be up, and at that point ZINC will be worth multiples of its current price."  lets just for argument's sake say that he thinks ZINC will be worth $25 at that point.  It will of course be painful in the short term if they have to do a dilutive equity raise to get Mooresboro operational, but even if there is 25% dilution or so there is still a lot of upside if Pabrai sees it as a 3 or 4 bagger from here.

 

obviously this is not how most people think.  obviously it is very hard to be completely emotionless and ride out that sort of volatility... but that is why Pabrai's returns are as good as they are.

 

Who was making decisions in 1965 based on how things would be in 2015, and how many of these people got it anywhere near right? Even if a longt ime in the future events prove you right, you can get killed in the meantime if commodity prices stay low for years or decades... Opportunity cost is a real thing.

 

in 1965.... probably phil fischer... and we know from Berkshire KO story that Warren and Charlie were thinking that way by the mid 80s... and we know that Pabrai is a Buffett follower.  I completely agree that opportunity cost is a real thing - that is why it is so difficult to invest this way... but if you read Buffett and Pabrai they talk about investing in things that are "inevitable."  If you really believe that things are inevitable, and if you have sticky or permanent capital, you can handle a lot of short term opportunity cost if you think the ultimate outcome is a multi bagger.

 

I meant about things like commodities and macro. I heard the same thing a lot when I was looking at Altius/Alderon. "China is going to build X number of airports and cities in the next decades, think of all the iron ore that will be required!".

 

Even if you're right that China will eventually do all those things, it doesn't mean that it can't take years or decades for commodity prices to go up, or that a slight overshoot by producers combined with a slight slowdown by the demand side can't crash prices for a long time yet the thesis is still broadly right.

 

Holding a good company like KO for the long term makes sense because you know that they'll probably make money 99% of the time unless they destroy what makes them good. You might not make a lot of money if you pay too much, but at least they should grow IV over time and put a floor under your mistake. Planning to hold a money-losing company in a commodity business for the very long term based on macro theories is something else, IMO. Cycles can be very long and are out of control of management. Just over the next 10 years they have time to change CEOs a few times, and who knows how good these new guys will be?

[Homestead31]

since people have been talking about equity dilution and pabrai, it is worth noting that Pabrai has commented publicly on ZINC and made it clear that he has a very long term view.  i think it is the recent interview that he and Spier did together where he talks about ZINC in context of 50 years from now there being 100 new mega cities on earth (or something like that - i am paraphrasing) and noting that ZINC will likely be the one of the low cost producers, if not THE low cost producer.

 

based on that statement, i think it is clear that when Pabrai thinks about ZINC, he thinks in terms of "at some point ZINC prices will be up, and at that point ZINC will be worth multiples of its current price."  lets just for argument's sake say that he thinks ZINC will be worth $25 at that point.  It will of course be painful in the short term if they have to do a dilutive equity raise to get Mooresboro operational, but even if there is 25% dilution or so there is still a lot of upside if Pabrai sees it as a 3 or 4 bagger from here.

 

obviously this is not how most people think.  obviously it is very hard to be completely emotionless and ride out that sort of volatility... but that is why Pabrai's returns are as good as they are.

 

Who was making decisions in 1965 based on how things would be in 2015, and how many of these people got it anywhere near right? Even if a longt ime in the future events prove you right, you can get killed in the meantime if commodity prices stay low for years or decades... Opportunity cost is a real thing.

 

in 1965.... probably phil fischer... and we know from Berkshire KO story that Warren and Charlie were thinking that way by the mid 80s... and we know that Pabrai is a Buffett follower.  I completely agree that opportunity cost is a real thing - that is why it is so difficult to invest this way... but if you read Buffett and Pabrai they talk about investing in things that are "inevitable."  If you really believe that things are inevitable, and if you have sticky or permanent capital, you can handle a lot of short term opportunity cost if you think the ultimate outcome is a multi bagger.

 

I meant about things like commodities and macro. I heard the same thing a lot when I was looking at Altius/Alderon. "China is going to build X number of airports and cities in the next decades, think of all the iron ore that will be required!".

 

Even if you're right that China will eventually do all those things, it doesn't mean that it can't take years or decades for commodity prices to go up, or that a slight overshoot by producers combined with a slight slowdown by the demand side can't crash prices for a long time yet the thesis is still broadly right.

 

Holding a good company like KO for the long term makes sense because you know that they'll probably make money 99% of the time unless they destroy what makes them good. You might not make a lot of money if you pay too much, but at least they should grow IV over time and put a floor under your mistake. Planning to hold a money-losing company in a commodity business for the very long term based on macro theories is something else, IMO. Cycles can be very long and are out of control of management. Just over the next 10 years they have time to change CEOs a few times, and who knows how good these new guys will be?

 

i don't disagree - i'm just trying to put myself in Pabrai's head.  I think he would respond that he is not betting on macro theories - he is betting on competitive advantages and the fact that the low cost producer always wins over time in commodities b/c the best cure for low prices is...  low prices.  as i stated earlier, given that we know several of the world's largest zinc mines are slated to be shuttered in the next year or 2, i think there is a good chance that this will not be a 10 year cycle... but i agree, it can be more comforting to focus on businesses with more certain cash flows.  it is also more difficult to get multi baggers out of businesses with more certain cash flows.  every investor's own temperment and patience will guide them toward which type of investment is better for them.  there is no right answer. 

[rishig]

The fact that the low cost producer always wins over time in commodities b/c the best cure for low prices is...  low prices.

 

Low cost producer always wins provided it has the balance sheet to withstand the pain of low prices in the interim. Otherwise, the business survives like you said but not with the same owners. The debt owners become the new owners of the business in the meantime.

 

To give you an example, Viterra (originally known as Saskatchewan Wheat Pool) is a grain handler in Canada. Canada is one of the largest wheat exporters in the world and Saskatchewan was the lowest cost handler that had almost a monopoly in this business. It handled over 60% of the grain volume. In order to reach it's low cost status, it had done tremendous amounts of capex in late 90s, leaving it with huge amounts of debt. There was no doubt that the business would survive, but not with the same capital structure. A few bad years of rain caused volumes to drop (similar to the collapse in prices in commodities today) and earnings to evaporate. In the mean time, the debt was coming due (similar to ZINC's debt in 2017). It was unable to negotiate with the debt holders to roll over the debt, and the debt holders became the new equity holders. The stock post restructuring was trading at a tremendous discount to replacement value. But at this point, it had pristine balance sheet. This is what Marty Whitman calls "safe and cheap". The stock was more than 10x in the next decade from that point on.

 

Not to say that same thing happens with Horsehead. I am just sharing my thoughts on what I learnt over the years. When buying assets, it helps to invest using Marty Whitman's safe and cheap approach. The safety comes from the strength of the balance sheet (which I don't see here, but may be I am overlooking something in the balance sheet that the longs see). It could be a multi-bagger, but not safe in my opinion.

[goldfinger]

They can sell Zochem, INMETCO and so on to pay debt if necessary. Competitors buy these (commodity) businesses on more understanding of the full cycle than the market (O&G companies included - to hint at PWE and assets discussions).

On another note Brian Dalton recently made sure to incorporate zinc royalties to his portfolio as he sees zinc as a better metal right now...

[Homestead31]

The fact that the low cost producer always wins over time in commodities b/c the best cure for low prices is...  low prices.

 

Low cost producer always wins provided it has the balance sheet to withstand the pain of low prices in the interim. Otherwise, the business survives like you said but not with the same owners. The debt owners become the new owners of the business in the meantime.

 

 

you are of course correct. 

 

however, once again putting myself in Pabrai's head, there are some pattern recognition bells going off in my head.  In Dhando Investor Pabria briefly talks about Tesoro, and if you dig around a bit on the web you can find the full story.  The short version is that Pabrai bought TSO around $7-8 per share because the market was fixated on the company's problems with debt.  The stock traded down to $1 as the market harped on bankruptcy risk due to the debt.  Pabrai held firm however b/c he believed that management could easily sell off assets such as a non core refinery if they needed cash to cover the debt.  Eventually the stock rallied as oil stabilized and the bankruptcy fears passed.  Pabrai sold out a year later for a 100% gain.

 

with that story in mind, i suggest re-reading the post on this thread on July 11th by AlexBossert in which he details the value of  Inmetco - a non core business that could be easily sold by ZINC if they had real problems with their debt.  I agree with Alex's position that Inmetco alone is likely worth $200 + million, which goes along way toward reducing the risk around the debt in an emergency situation.

 

however, it should of course be noted that Pabrai has proved several times that he is not afraid to ride his ideas to $0, so nothing here is certain.  From my vantage point however, the risk reward for an investment in ZINC is favorable.

[rishig]

The fact that the low cost producer always wins over time in commodities b/c the best cure for low prices is...  low prices.

 

Low cost producer always wins provided it has the balance sheet to withstand the pain of low prices in the interim. Otherwise, the business survives like you said but not with the same owners. The debt owners become the new owners of the business in the meantime.

 

 

you are of course correct. 

 

however, once again putting myself in Pabrai's head, there are some pattern recognition bells going off in my head.  In Dhando Investor Pabria briefly talks about Tesoro, and if you dig around a bit on the web you can find the full story.  The short version is that Pabrai bought TSO around $7-8 per share because the market was fixated on the company's problems with debt.  The stock traded down to $1 as the market harped on bankruptcy risk due to the debt.  Pabrai held firm however b/c he believed that management could easily sell off assets such as a non core refinery if they needed cash to cover the debt.  Eventually the stock rallied as oil stabilized and the bankruptcy fears passed.  Pabrai sold out a year later for a 100% gain.

 

with that story in mind, i suggest re-reading the post on this thread on July 11th by AlexBossert in which he details the value of  Inmetco - a non core business that could be easily sold by ZINC if they had real problems with their debt.  I agree with Alex's position that Inmetco alone is likely worth $200 + million, which goes along way toward reducing the risk around the debt in an emergency situation.

 

however, it should of course be noted that Pabrai has proved several times that he is not afraid to ride his ideas to $0, so nothing here is certain.  From my vantage point however, the risk reward for an investment in ZINC is favorable.

 

That's a fair answer. I will look at Alex's response to understand the value of the non-core assets. Thanks

[RadMan24]

The fact that the low cost producer always wins over time in commodities b/c the best cure for low prices is...  low prices.

 

Low cost producer always wins provided it has the balance sheet to withstand the pain of low prices in the interim. Otherwise, the business survives like you said but not with the same owners. The debt owners become the new owners of the business in the meantime.

 

 

you are of course correct. 

 

however, once again putting myself in Pabrai's head, there are some pattern recognition bells going off in my head.  In Dhando Investor Pabria briefly talks about Tesoro, and if you dig around a bit on the web you can find the full story.  The short version is that Pabrai bought TSO around $7-8 per share because the market was fixated on the company's problems with debt.  The stock traded down to $1 as the market harped on bankruptcy risk due to the debt.  Pabrai held firm however b/c he believed that management could easily sell off assets such as a non core refinery if they needed cash to cover the debt.  Eventually the stock rallied as oil stabilized and the bankruptcy fears passed.  Pabrai sold out a year later for a 100% gain.

 

with that story in mind, i suggest re-reading the post on this thread on July 11th by AlexBossert in which he details the value of  Inmetco - a non core business that could be easily sold by ZINC if they had real problems with their debt.  I agree with Alex's position that Inmetco alone is likely worth $200 + million, which goes along way toward reducing the risk around the debt in an emergency situation.

 

however, it should of course be noted that Pabrai has proved several times that he is not afraid to ride his ideas to $0, so nothing here is certain.  From my vantage point however, the risk reward for an investment in ZINC is favorable.

 

Homestead you bring up a valuable point. While many investors are lamenting management over the current situation, let's look at a piece of their track-record. Specifically, they bought Inmetco for $34 million in 2009. It earned $14 million pretax in 2014 and about $10 million in 2013, $13 million in 2012, excluding insurance benefits. Capex requirements $1-3 million, depending on expansion plans. $1 million high end of maintenance capex. I'd say that is a fairly strong return on capital, wouldn't you?

 

Zochem, including initial purchase price and investments to date, have totaled $32 million. The segment produced pretax income of  $13.5, $8, $3.5 million in 2014, 2013, 2012, respectively. Again, pretty good returns if you ask me, purchase was made in 2011.

 

Pretax income from these two segments is down about $3-4 million pretax thus far in 2015.

 

Let's say Horsehead gets in a bind, they can easily fetch $140 million for Inmetco (other estimates do reach $200 million). Worse case, Inmetco is sold and used to pay down/refinance secured loan and other outstanding debt in 2017. Worse case--as in you really want he company to keep this business, but to save your investment you don't mind seeing it go. 

 

By and large, if this plant isn't up and running by 2017 I would be disappointed. But the risk/reward is well worth it.

[BG2008]

http://seekingalpha.com/pr/14558476-horsehead-update-on-mooresboro-nc-facility

 

Horsehead Holding (NASDAQ:ZINC) -4.1% AH after reporting its Mooresboro, N.C., zinc facility produced ~3,200 tons of zinc metal in August, bringing quarter-to-date production to more than 7K tons after two months.The company says August production was limited by equipment downtime primarily related to plugging of lines carrying feedstock, gypsum and lime, which forced idling of the plant for several days; and lower than expected current efficiency in the cell house, which resulted in reduced production for a given power input.ZINC says modifications were made to reduce the frequency of the plugging issues, and current efficiency has since improved and is expected to continue to improve in September.

[jawn619]

Hey everyone I recently got my site up where i share case studies notable investors have made. ZINC is one of them and I was surprised to see how different the company was in 2008 when Pabrai first bought it and now.

 

http://raritancapital.com/casestudy/zinc/

[zizou]

Small purchases by CEO:

http://www.financialwisdomworks.com/insider-buying-horsehead-holding-corp-ceo-purchases-56550-00-in-stock-zinc/14378/

[mozy]

The CFO just picked up 10,000 shares, also.

 

http://www.sec.gov/Archives/edgar/data/1216622/000120919115069714/xslF345X03/doc4.xml

[supertutti]

New 5 year low, but do not see any news or production updates. Just general sell off on falling commodity prices?

[kab60]

Probably that and time not really working in your favor when you are that leveraged.

[BG2008]

Apparently, ZINC has 14.2mm shares short or 25% of the shares outstanding. 

 

http://www.moneyflowindex.org/horsehead-holding-corp-nasdaqzinc-short-interest-update/3126308/

 

I actually would like to hear the bear thesis.  From an intrinsic perspective, ZINC Prices trading at 80 cents is not good for the business in a very meaningful way. 

[JEast]

I posted a few years ago (back in 2013) on this guy but have been surprised by some of the comments/analysis. 

 

At the risk of being called for Monday morning quarterbacking, I will proceed nevertheless.  I don't believe anyone has ever commented on the fact that Técnicas Reunidas has never built a solvent extraction zinc plant before.  Given that this investment is somewhat of a binary outcome of the plant working properly seems key to the discussion and thesis.  In addition, even Técnicas Reunidas states that the capacity of the plant they are building is only for 135,000 tpa versus the 155,000 tpa number repeated over and over.  Nit-picky yes, but we are discussing outcomes based on numbers and results here.  These type of projects rarely ever hit nameplate capacity even after 3-4 years so the 155 numbers look like wishful thinking or much more capex needed.

 

A possible side point is that in the commodity industry, long-term contracts are not sacrosanct (e.g. EAF dust) as one only has to look at all the renegotiations in the oil sector presently.  However, North America and the US specifically may be a little better at honoring long-term supply contracts.  If the potential spike in the commodity price occurs or stays elevated for some length, as they supply/demand debate suggests -- do the mills ask for concessions?

 

Another item up for discussion is the advantage of being the low cost producer.  All on this board gets this point for almost every businesses in existence.  If ZINC is a true compounder as the bull thesis indicates, then the low cost producer is key and the winner.  However and in a counter intuitive observation, if you want to make large amounts of money in the commodity business you don't go for the low cost producer.  You invest in the highest cost producer and potentially make multiples on the leverage in the rebound.  The question is if this guy is a compounder then you do make multiples over the long-term, say 7-10 years.

 

 

Disclosure: No position, just challenging my fellow board members as this is an interesting intellectual exercise.

[randallchsu]

I don't believe anyone has ever commented on the fact that Técnicas Reunidas has never built a solvent extraction zinc plant before. 

 

I am confused. The Skorpion mine is using the Zincex technology developed by Técnicas Reunidas for solvent extraction?

 

Here is a case study on the Skorpion mine - http://www.saimm.co.za/Conferences/BM2007/329-342_Gnoinski.pdf

 

A follow-up on the Skorpion operation in 2009 -

http://www.saimm.co.za/Conferences/BM2009/245-258_Musadaidzwa.pdf

 

Edit: added the 2009 link

[JEast]

As a former engineer, and most engineers in general, look at these projects differently.  Yes, the output may be the same but the 'process' to get to the output is not always the same.

 

As for Skorpion, I believe Union Minière (Umicore) built it using Técnicas Reunidas technology.

[Green King]

I am just curious how can someone believe anything the management says at this point given their track record. Secondly given the nature of this business how could there be any compounding in this business give there is a limited supply of raw material that needs to be secured with contracts. This is simply a binary bet on whether the plant will operate as promised by management on time and on budget which is impossible at this point to handicap given the management's track record.