Are they a Friend or Something else ?, page-152

Everyone here seems convinced of strong fundamentals.

 

 Please tell me whatthe pricing mechanism is for offtakes linking to domestic China lithiumcarbonate prices.

 

There has been some discussion on renegotiating the pricefor spodumene per tonne with Ganfeng and General Lithium.

               

Does anyone know if this has been successful?

 

I understand many here are waiting to see the quarterly todiscern the cashflow activity of the company especially since the 1st shipment,so until then there is no clear certainty on fundamentals, is this correct?

 

I have seen the Shanghai presentation for this month and Inote the average of 1.27% for iron oxide, a critical contaminant for processors.

 

Does anyone know the detail on this measurement? Forexample, what is the % for last two shipments is?

 

If the 1st and 2nd % of iron oxide is announced, why notclearly the last two?

 

I see that at least one shipment would have to be over the1.4% penalty level for discount. Therefore as above knowing the volumes of eachshipment, of anyone knows may help.

 

I am also questioning, why just show the average, why notthe range, the variance, it’s obviously not a ‘molarity’ equally dispersed.

 

If the first shipment of 0.072% is left out the shipmentaverage for iron oxide improves dramatically, it avoids moving above thepenalty threshold of 1.4% for iron oxide contaminant.

 

So this presentation, I know it is just a corporatepresentation, but still the frame of reference the company is providing is 4shipments @ average of 1.27%. Which means last two have average over 1.57%.

 

This is, if accurately reported by the company, a serious‘bone of contention’ in any apparent renegotiation of the spodumene pricing.

 

I also note that the Shanghai conference hosts, PlattsS&P Global l, are less conservative than the consensus view PLS relied onto formulate its pricing mechanism and forecast pricing.

 

To be sure I don’t think many saw the sinking of thedomestic China lithium carbonate price.

 

We saw Optimum Nano assets frozen, we could read evidence of‘mixing’ industrial grade with battery grade on the LC market by reprocessingenough to label an inferior product (often from Qinghai apparently) as batterygrade.

 

And we could see a slowing down of the sector as it retooledfor different lithium chemistries like NMC, but also many issues to change tothat chemistry.

 

Hence Beijing changing policy to market driven rather thanpolicy driven regarding battery development support and direction.

 

The huge issue is then, some of this shorting we are seeingon PLS is informed by the above issues, and it will continue until it’s clearwhat pricing PLS is obtaining for its product and in comparison to other companies.

 

There’s also the added irritation of what variance,

especially with iron oxide exactly, in quality of SC6 PLScan feasibly economically produce.

 

That first shipment with 0.072% iron oxide is looking like aspecial edition more and more. (Yes, I think I recall there was reprocessing wejust don’t know how cost effective including time that is.)

 

People here should be proud of the progress to mine, thepublic profile developed, but also equally, not fall in love to the point ofnot carefully checking the frames of reference management hand out on thequality of SC6 being produce.

 

Variance in consistency is very problematic for processors.PLS is not the only one, but we here are all still in the ‘eye of the storm’not knowing what has eventuated in the last quarter clearly.

 

The presentation statistic on iron oxide indicates by itsown logic a not so positive 3 & 4 shipment.

 

 If they were positivethey should be numerised clearly, not combined numerically, with all shipmentstogether.

 

This is suspicious to obscure like this.

 

If you don’t like it what I say, then as requested above, Ido seek more data.

 

Many of the long term holders here saw how PLS was soconfident about the Rofr legal matter back 2016, to only learn that MRL proved morecunning than anyone imagined.

 

 It pushed the pricedown I recall to .38 cents. MRL now have about 8% of the company.

 

70 cents could be a good entry point, it’s holding well, butwhat are institutional clients waiting for? The more detail on the pricingmechanism and figure is likely...