Dear Steven,

Since you asked the same question on both the HPQ and PYR Forums, it's just normal that I coordinate my answer with Peter…

And as Peter mentions this week:

“Steven,

 We haven’t forgotten you and your question.

I have just gotten back from Europe/Middle East and I will respond to you shortly. With references to Timminco and getting '...off the bus..." you have touched on some very interesting issues that plague us all.  This is just a quick note to say that you have not been forgotten and a reply will be following.

Sincerely,

Peter Pascali”

So there will be a more in-depth answer coming.

Now I have a question for your Steven, were you aware that the same line of questioning regarding transparency was used in 2012 about Orbite-Technologies (Ort.t)?

https://stockhouse.com/companies/bullboard/t.ort/orbite-aluminae-inc?postid=20443831

What is truly ironic today is that the reason given in 2012 by the poster (Company) seems to state that Orbite-Technologies (Ort.t) would not be the next Timminco because they were open, transparent and they had actually allowed people to get out of the bus!

This having been said, I am happy that you chose that quote from the article about Timminco because you are giving me an opportunity to educate investors on what really happened!

To put it simply, Timminco problems were more Macroeconomics than anything else…. 

Timminco was developing a new metallurgical process to produce Upgraded Metallurgical Grade Silicon metal to be used for the fabrication of solar cells. 

They were doing this in a period when Polysilicon prices skyrocketed from $75 a Kg in 2006 to reach an all time high of $500 a Kg in 2008. 

These crazy price hikes were mostly driven by manufacturers of solar cells afraid that they could not have access to material needed to produce the solar cells, so they simply stockpiled the material under the assumptions that prices were only going up…..

At the same time, fear of not having product made buyer signed off take agreements with new unproven players under the assumptions that market would be in deficit for a long time….

By late 2008 start of 2009, the credit crises combined with more capacity coming on line just created a perfect storm and prices collapse.

Polysilicon Price chart:

http://i.bnet.com/blogs/polysilicon-price-histories.jpg

Unfortunately for Timminco, this happens as they were ramping up their production capacity and dealing with normal start up issue.

From Timminco Financial:

•    Q4 2008, they were getting $65 per Kg (or $65,000 per Tonnes) for their Solar Grade Silicon Metal;

•    Q1 2009, they were getting $58 per Kg (or $58,000 per Tonnes) for their Solar Grade Silicon Metal; and by

•    Q3 2009, they were only getting $39 per Kg (or $39,000 per Tonnes) for their Solar Grade Silicon Metal.

So as price crash and supply flooded, buyers with off take agreements looked at any reason to cancel their money losing deals….

And that is why Timminco did not survive… Even if all worked as planned it would have been impossible for them to survive such a dramatic price cut (90%) in such a short period….

http://www.earth2017.com/wp-content/uploads/2011/11/ilOK90NYZ7iY.jpg

Ps, It is just now in 2017 that market demand as fully digested the overcapacity created in 2007-2011…

Regards,

Bernard Tourillon
CEO HPQ Silicon Resources Inc

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