Thanks for your well thought out post
@SeeTheWorld I appreciate being able to converse without someone flipping their lid.
@dolphinwrestler your good/bad comment made me laugh, thanks!
On your post
@SeeTheWorld I am drawn to 3 parts. One of the weather around Pilgangoora, which would tie to cyclones. I remember some time back they had one go directly over the mine, that was also the time that Pilbara allowed Altura employees to use their bunker. At the time I had a somewhat sschadenfreude moment at the thought that Pilbara and Altura were potentially going to be blown off the face of the planet and it might cause spodumene prices to rise. As with most assumptions I have had about Pilbara in particular it wasn't to be the case, and after they picked up the plastic chairs that were blown around, they were back in production. As a result of that test I don't believe anyone should be concerned about a weather event affecting their production, however if I recall correctly Mineral Resources was affected in Wodgina.
On a comparison of shares on issue, I would go back to the point that Galaxy consolidated. As of May 2017 shares in the market was 395,138,471 vs Pilbara at 1.277 billion.
I had done a calculation on the Pilbara forum this morning related to LCE vs Marketcap and I had the number of shares in Galaxy much lower.
Going from the number of shares in market you have shared we can see that based on my start date of May 2017 when Galaxy wanted to start again (so to speak) we can see that Galaxy have increased their shares in the market by ~22% and Pilbara by ~56%
Given that shares are generally only worried about by the company in an instance such as a capital raising then we need to be able to allocate what value was brought into the company by those further issue of shares.
For Galaxy, they sold Sal De Vida North and according to the prelim report ending 2020 have US$210 million. (AU$274 million)
Pilbara, acquired Altura and increased their total LCE capability from 41,250 to 68,750 (40%) according to their October presentation they carry a debt of AU$110 million whilst at the same time having almost the equivalent at AU$86 million. (of course that has since changed but I don't think by too much)
Post consolidation Galaxy's share price May 2017 was around $2.50 or 50c pre... and Pilbara was around 40c.
Those 3 paragraphs refer to value that has been unlocked by the company, and also return of investment for each share holder of which, since Galaxy consolidated their shares they have disposed of ownership and an asset, used a majority of that cash, then went to the market again and asked for more funds. Galaxy's LCE value remains at 25,000tpa.
Share holders as of right now have only seen an increase in the share price post consolidation of ~30 cents or 10%
Pilbara on the other hand increased their LCE to 68,750tpa and their share price has increased from ~40c to $1.15 a total gain of ~65% which also exceeds the 56% increase in shares.
It's very much a tale of two companies, one so focussed on rewarding management for poor performance, unwilling to partner with other companies, afraid of their own shadow and stagnant growth still stuck at 25,000tpa LCE and the other that hasn't required a consolidation to get its share price up, has increased its LCE production by more than Galaxy produces and will produce even if Galaxy elected to do both stage 1 & 2 at Sal De Vida right now... which I'll point out wouldn't commence full production until 2024 (we know this)
Final point, is that on GXY potential to acquire another company. I am not laughing at you, I am laughing at the idea of Galaxy actually doing just that. We all know, and it's pretty obvious that Galaxy wanted to acquire Alita, yet even with someone such as Peter Bacchaus on the board they couldn't get that one together. Galaxy did acquire GMM after using them as a life raft to stay afloat. Of all the expectations that many of us have had it would seem to many that the management of Galaxy have been nothing less than a dud. They brought the company back to life, but have done very little with it since. If anything, I would put to you that it is Galaxy that is wanting to be taken over.... at least to save it from itself.
Pilbara wise, they have done what is considered by many to be an absolute master stroke, in their acquisition of Altura, a producing mine. The timing couldn't have been more perfect with spodumene pricing rising at such a rapid rate that even the most bullish are stunned.
If we are to say that Galaxy might/could achieve the same feat, what company would it be?
We know they need all that cash to build Sal De Vida and a scrip for scrip roll in would add to the dilution with no result that the company has already provided.
Reading what you posted
@SeeTheWorld I wonder if you have ever considered like me what a combined company of Galaxy and Pilbara would look like. It is perhaps improbable to occur, purely on the point that I doubt that this management would be willing to let go of 'their company' rather than doing what is best for the shareholders.
Just on a current LCE value there would be a total of around 100,000tpa which Martin Rowley spoke of in his 2019 annual report preamble. The company could use the funds from all 3 hard rock operations to build both Sal De Vida & James Bay (including a converter)
The total LCE value would be 165,000tpa which is roughly the equivalent of Albemarle. Boosting Sal De Vida from 25,000tpa to 50,000tpa would have a company LCE of 190,000tpa... Larger than Albemarle..... Then why not pick up CXO along the way.... That ensures that Yahua will still remain a customer of the new entity with Mt Cattlin runs out.
A simple scrip for scrip gets the job done... Unlikely as I said... but an exciting possibility.
