AFR: $60m cap raise at 30c, page-366

I said this 2 years ago - lithium boom will end in tears. I used the example of iron ore where I lost around 10% of my entire portfolio value from investing a lot in mid caps (deviating from my usual blue chip compound only approach). Nup, no one wanted to hear it.

Mineral prices always almost return to long term averages which is generally an xyz premium on the tier 1 cost of production. Yes, it goes up and down, however a 1 mine, single commodity company will usually go bust once the equilibrium occurs, they simply have no other cash flows to supplement and have debt that eventually crippled them.

Weve seen it time and time again, yet every 5 years a new era of suckers try their luck hoping for riches. The lucky ones get out or get a takeover, the rest, well, end up with a capital loss.

Iron ore, uranium, oil, gold, nickel, coal and now lithium. All massive bubbles over the last decade that went from boom to bust. Their is no ‘this time is different’ or ‘buying at lows for the next boom’. These companies tend not to survive or continually dilute holders to survive. Lest we forget MMX, AGO, GBG, PDN and the list goes on.

Take the loss, learn valuable lessons and diversify risk. And I don’t mean diversify through buying other penny dread lithium explorers, i am talking about other sectors outside mining.

As Einstein said: “compound interest is the 8th wonder of the world, those who understand it earn it, those who don’t pay it”. Probably only MIN met this definition for lithium exposure as everything else was rubbish explorers or development phase - is no dividends and cashflow.

Goodluck all. Not trying to rub salt into wounds, merely reflecting on lessons I learnt the hard way and hope others can learn from this.