AGM, page-327

Thanks Gary.
Honestly, I'd rather you were calling me a complete dumb ass, but came here to check the rapidly rising Galaxy share price.


I've pretty much already said what I think is going on with the daily pressure of shorts at the moment.
Galaxy attracted a lot of high volume trading interest from ASX200 entry.
We've basically consistently doubled or tripled volume from last year.
Part of this is having (not checking right now) probably the lowest share price on the current index.
This means a 1c trading profit is a significantly higher return than you can get in other ASX200 companies.
We're sort of a toy share price compared to the others. Its also very easy to play with.

ASX200 also brought with it a huge amount of professional shorting.
What fancy name do they call them now - contrarian investment specialists...?
1m shares are comparatively pretty cheap and still seem to carry weight when you can throw them around like confetti.

What was opportunistic (or even ambush) shorting before (Mac bank, GXY caught with pants down after GMM merge) or even text-book style, driven by bad news (the inability for the company to revise a firm first shipment date after GMM's plans and market guidance were shown to be too optimistic) - now they are one of the firm favourite default day trades.
Most cover, pretty much religiously on a daily basis but the constant wearing away has an impact.

That's why I think you have to give some credit to the company for making it known that they are aware and working on a considered response.
They've already done it the normal way - achieve and publicise a set of target-meeting objectives and achievements
The announcements have been stellar lately. Better than most would expect.
Perhaps the shorts are even more effective because its so counter-logical that the share price shouldn't be under pressure at all. Shorters should be scared to place a bet.
We should have gained clear air as a producer without clear competition in our sector.

I believe its clear that GXY management have decided that consolidation, and changing the value of the share is one of the answers to the problem. If a single short can not make the equivalent of an annual term deposit return from a quick in and out trade, then the change in value of this stock will force them to take a bit more risk and go longer with their shorts, leaving them open to higher risk and less return.
Yes, clearly - everything is relative. It may have no effect.
But remember the casino always wins on a small percentage advantage.
All we want is just a tiny fraction more advantage.

Sonic Blast posted a list of recent consolidated ASX companies. It wasn't a bloodbath as some say is the doom of all consolidation. Yes - crappy companies do it all the time. This isn't a crappy company.
It has raised capital for its current works. You have some fine market minds behind this company now.
This is a considered strategy. Remove it and the status quo is likely to continue.


Galaxy are sort of Old School in a sense.
Anthony Tse would prefer to run the ship from results and market fundamentals.
The Old School - no over-egging and with slightly polite and restrained use of social media to trumpet their victories.
I don't see AT ever stooping over to accuse anybody of price manipulation - but if we knock back this strategy from the company - something that has the effect of moving our house into the equivalent of a better suburb, then we are basically refusing what they consider to be a good result for the share price growth.
(leaving aside the possible additional stock market listings, positioning for funds etc)

Somebody said it would show some market confidence if the directors bought some shares on the market. Yep. For one day. Then what? Share buy backs? When we are funding SDV/JB?
AT hits the money markets and seems to be jetting around constantly spreading the Galaxy word, delivering impressive podium performances where he is more often than not, one of the most intimately connected lithium minds in the room, from the real experience at the selling/negotiating pointy end.
It does result in spikes of enthusiasm - but the old game comes back. Something must be done, and at least they're trying something to change it up. Turn the tables on the shorters and get them out of their comfort zone.

There are a bunch of other things that are always sitting there on the sp too.
World political events, even weather. They will always be there.
A company as big as Galaxy gets a large base of share holders, and I guess we represent the full cross-section and gamut - from those who are hair-trigger sell on the smallest dark day in the news cycle, through to more hardened souls who identify these as buying opportunities (because like all things, they pass and life goes on).

The simple reality is that Mt Cattlin is a sort of insurance value that the absolute bottom will never fall out of this company.
That work is done. The tap has been turned on. Money has started flowing faster.
Even demand can just stay where it is. We don't need to over-state our prospects.
Or get outrageously hyperbolic about the state of future lithium demand.
The company has its contracts and the surety of supply and clients and the discipline of delivering on promises and the steady operation of a money-making enterprise.
Those who have accuse the company of lying have been proved wrong. They have to focus their fire on saying that its the next step that will be f-ed up. But then you just have to look at the track record.
Galaxy has delivered and doesn't seem taken with thought bubbles or fads or knee-jerking out announcements to calm the share price. Its been a solid performance now for months on end.

We're currently far below a fair valuation even for these earnings, and there really isn't that much difference between where we are at James Bay, and most large-ish market cap spec lithium stocks - cept it provides us no benefit to the sp.
Same with SDV. Those who don't understand brine (and that is almost absolutely everybody) can simplify and run their own imagined timelines and numbers and just make stuff up.
Or just somewhat irrationally not like it vs good ole hard rock mining.
So, we are in a bit of an information gap that is easy to exploit - to stoke fears and add more fake news and valuations and constant threats of CR. That's really effective cause the last one was sprung on us by surprise.

Truth is I was positive on the last CR, as it pushed the timeline for SDV aggressively further forward in time and to get those ponds constructed as fast as possible.
I fully expected that an aggressive SDV timeline would be treated well by the market as it happened so quickly after the first shipment. I though the market would respect the energy and momentum...
sadly no.
I'm going to blame the storm a little there too. That storm was a strong sell for some, with the risk that it could have done permanent damage to plant infrastructure.
The pattern of sitting on the sidelines and wait for the bottom started around then.

SDV is a huge project and there was no sense in waiting as soon as Mt Cattlin achieved nameplate.
Clearly Galaxy waited until they were fairly certain that there would be no significant capex expenditure on Mt Cattlin as well - (don't want to make that classic military mistake of fighting a war on 2 different fronts).
Now the incremental increase in spodumene recovery can come from improvement of process and staff experience.
Hartley's are still predicting 250kt output from Mt Cattlin for next year - so its quite possible that the next AT market "surprise" to the upside is that the monthly output volumes steadily start moving towards that figure.
That's one they've got up their sleeves.

For other companies - you can see on days like this particularly, waiting around without even being at square one is devastating, because when the sand castle finally cracks its all just sand and promises again.
Sad stories of losses are mounting up. Vultures circle the sector now as companies under pressure make rushed decisions or trip over.
To a certain extent Galaxy is paired with the fortunes of these specs and you'd have to be a bit blind not to see the trading days when our sp is moving in the exact same pattern as other lithium stocks.
That means a sort of lazy, one-size-fits-all trading pattern. Same goes for journalism and the desire for sensationalism. Problem was the wrong stocks were hyped right from the beginning.
Galaxy was the ugly duckling. But jeez did it grow up quick.

I see consolidation as ultimately product differentiation.
Even some senior market analysts seem ignorant about what stocks are in production, near term, or much further away. I'm confident consolidation will broadcast to the market that there is Galaxy - and then ----- way --- back ----- there --- are the ones who are still packing briefcases with glossy brochures to beg with the Chinese lithium masters for a dollar to turn some earth and get started.

I'm not going to mention company remuneration any more. Its a sore point when the sp is low.
I'm sure its driving a bit of negativity too.
If we were sitting in the 70s I guess they would have been easily rubber-stamped.
A conversation with a friend of mine suggested that the common perception was that perhaps the most worthy Galaxy employees at the moment were Anthony and Nick.
We can see what they are doing for us very visibly.
We don't get to see what the others are doing - and perhaps thats a bit of a mistake in this social media world.

I think I've said all this before.
Sorry... I do go on a bit.
But hope this puts in all in one place.
I really don't care if somebody disagrees with these views.
It's too easy to characterise management as evil greedy fools when the sp is low.
Those same people are full of praise 20c later.
Plenty of people in this industry have a lot of respect for the management of this company, and rightly so.
They've passed a lot of test with flying colours.
I like what I see here and my LT investment is firmly behind this through any short term price pressure.

That said, there is just too much good stuff going on now to be despondent, or feel that this disappointing sp period can last much longer.
Any day we could be get through the kind of announcement that brings things that are still a little indistinct into much greater focus.
With the AGM announcement mentioning James Bay as having the possibility of being green-lit first, there is definitely the possibility that it plays out that way, and this is the first time its been signalled as a strong possibility. They have an advanced team there now - and I'm guessing we're not far from some encouraging progress report there.
Those who have possibly formed the view that Galaxy's future is plodding slowly towards brine may get quite shocked by the sudden commencement of another hardrock plant in Quebec, with the company quickly throwing Primero into some furry jackets after the new DFS is produced.
Certainly it's a very much more affordable expansion, and one that Galaxy could tackle on existing production cashflow.

Strategic partnerships with a range of juniors and majors can quickly change things too.
That is another aspect to enabling the company to raise cash quickly when it is important to do so.
A well chosen M&A decision at the right time could add surprising new value, taking out a struggling competitor or spec with an excellent asset, or a vertical production asset. More and more juniors are closer to failure now, or possibly surrendering assets that they can see they will never be able to fund. We don't want to tell management not to use every trick in the book to add company value, just because we aren't able to see all the opportunities that are being constantly offered by circumstance.

The only real wisdom I guess is to remember
At the end of the day, Another one starts.
Good Luck