Ann: ARGOSY SIGNS MOU FOR STAGE 2 FUNDING, page-48

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rae915

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20/03/17

22:56

Post #: 23495442
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Originally posted by Danzas ↑

My favourite comment in the announcement is from Jerko himself:

Argosy Managing Director, Jerko Zuvela commented “We are delighted with CCK’s interest to fast-track Stage 2 development works at the Rincon Project and continue our comprehensive development strategy toward production of LCE product.”

What people need to realise is that fast-tracking Stage 2 development works at the Rincon project will cut the project timeline to earn 77.5% by a significant amount. Stage 1 was to produce 100-150 tonnes of LCE product by Dec 2017-Mar 2018. Stage 2 would have commenced pending successful Stage 1 and the Development works for Stage 2 would either have been completed during early 2018. Product from Stage 2 would have been due late 2018.

If they obtain funding for Stage 2 within a few months and start Development works for Stage 2, which means building larger ponds/then lining them and pumping brine they could be pumping brine by Dec-2017 to early 2018 (compared to only starting development works). They could have 1000-1500 tonnes of LCE between June 2018 to September 2018. This would be almost 6 months early and as they would have 77.5% interest meaning the flow-on effect to AGY’s Market cap would be significant.

All in all this announcement has proven to the long term holders that Jerko and the team have big plans and will ensure maximum value for shareholders. This is what happens when you have so much skin in the game. Those who can’t see the fundamentals, and the potential here will have only themselves to blame. Once a binding agreement is confirmed AGY will fly. The most likely agreement will be for an investment in AGY at a premium like the 3c for $3M when the SP was 2.3c (30% premium). A 30% premium on VWAP of 3.9c would be 5c… just throwing that out there. The deal may be for investment/as well as an offtake of product and upfront cash payment for this to minimise dilution.

AGY have really proven they’re ready to deal like a mid-tier and they’ll certainly get there. Those who are patient in the long run will prosper. I'll be holding long. If ORE, a company that produced 6,542 tonnes of LCE in the first-half of 2017 (annualised to 12,000 to 12,500 tonnes), be capped at $610M, then AGY producing 1000-1500 tonnes of LCE should be priced well between $50-100M MC. This should see AGY hit an SP of 10c.

That is the ultimate difference between us and the rest of the lithium juniors. We have production on the cards and a timeline to produce. With a technical team that's now highly sought after with potential synergies to be unlocked in the future.

Good luck to the LT-holders! I'll be coming along for the ride!

Expand

don't you think that any company that funds AGY may want a % of the JV?
This MOU is lite on details.

AGY Price at posting: 3.6¢ Sentiment: None Disclosure: Not Held
1 Upvote

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