Mt Cattlin hasn't been profitable for many years. You agree with that.
We don't know for certain if the spodumene oversupply has come to a close, but the pricing we are seeing from various sources indicates that it is going up again.
Do you know if the company is still paying 10% to Mitsubishi?
The reason I ask this is that from what we have seen, a varying cost of production, I was going to say that the company would at least need to be receiving $500 per tonne to be profitable, this would allow for the wild variations in their cost to produce that they have experienced over the years.
But the problem there is that, if they are still paying Mitsubishi 10% then that would only provide $450 per tonne. Which means they need to be receiving just over $550 to be able to factor that cost in also.
I think the thing you miss when it comes to an evaluation of Galaxy, is that Mt Cattlin has a finite resource that comes to an end in the not too distant future, so it is always at the back of the mind of anyone doing an evaluation of the company's worth. This is also probably what Peter from Potter considered when he wrote up the analysis that you didn't agree with. Though I haven't read it.
What was his reasoning for the value he gave to each asset? If you wouldn't mind sharing.
Given the recent trend of the NASDAQ, DOW & S&P 500 moving down over he last month and the huge beating that lithium stocks copped overnight he is possibly going to be right with his price target if for no other reason than a macro affect that is taking shape.
The saving grace for lithium stocks will be seeing that continued upward trend of pricing and not only in lithium chemicals.
We see people celebrating increases in spodumene pricing that is the same at 2010 pricing.
It's obvious that the transition to electric vehicles is happening and likely to continue to gain pace as the years unfold. Those EURO 7 plans sound like they would give the sector a massive push along, as unlikely as it is that they would be achieved.
But if you then factor in that every company is able to sell every bit of product they have at top dollar. Who is going to be the more profitable lithium company on the ASX between now and 2025?
You would certainly have to place IGO in their with their ownership in Tianqi Australia.
Mineral Resources, they will have ownership in 2 mines with 2 of the largest most respected lithium companies in the world. Albemarle and Ganfeng.
How about Orocobre, I think you mentioned being in them also. That plan for the hydroxide converter in Japan in partnership with Toyota is a good one.
Pilbara, with two fully owned mines and quite an impressive management team that has even won me over, a long time detractor of that company.
Neometals, they still have rights to spodumene from Mt Marion, and plans for a converter in India I believe.
Have I missed any of these other outstanding potential investments?
I can probably give some good reasons for most of their market caps. But for Galaxy, these days I would struggle.
How do you justify the company having a market cap of now $1.2 billion @GCar?
- A mine that's running out
- A brine resource that will only produce ~10,000 tonnes until that's expanded.
- James Bay in the most harsh of climates when it comes to mining, in a country where lithium company's regularly fail.
What did Peter from Potter have to say on each?
GXY Price at posting:
$2.44 Sentiment: None Disclosure: Held
