Palladon: Started mining and shipping
So far Q3 has turned out great for our holdings. So far KVHI and CPD announced great Q2 results. Today, Palladon announced an update on the initial shipment to its Chinese customer.
Mining activities have resumed at Iron Mountain. To date, three trains have left Cedar City on the Union Pacific Railroad bound for the port of Richmond, California. CML has leased a fleet of modern bottom-dump rail cars that are well suited to handling its product. Ore is being received and accumulated at the Port of Richmond for the first ocean shipment, which is currently expected to occur by the end of August. Each ship will transport approximately 55,000 tonnes of iron ore.
This is a huge milestone for the company. The management team has finally delivered. Although we still don’t have financial information on the margins of these shipments, my understanding is that the run-of-mine ore is likely to be low margins for the company. The key for the company will be to produce concentrate product at the mine and delivery it to the customer. This milestone is a huge step forward in the direction of producing concentrate product.
I would expect the company to start looking for financing to develop the concentrate product. This delivery to its customers will validate the company’s ability to ship the product and the demand for its product.