Nah.... I'm more of the view that the hand brake should really come of and the SP really lets loose.
And I say this in part because of some of the comments from Quebec's Finance Minister back when Nemaska was settling and emerging from its own bankruptcy administration and re-structure back in the latter half of 2020.
In particular these words should resonate strongly as toWHYSayona is not just well placed , but ' BEST ' placed to be Quebec's ' Each Way ' Bet in seeing ALL its Investments in this sector ( ie Investment Quebec ) being returned to its stakeholders and the people of Quebec in the nearer term.
And like I've stated before in many of my other posts , Quebec via I.Q is NOT in this to simply park tax payers funds in an under performing asset with no upside potential. Remember these are the Guy's who had made almost C$1 billion on their investments just in the 2020 - 2021 financial year.
So what do you reckon they are going to realize from their Lithium exposures in the 2021 - 2022 financial year. And ' HINT ' :- most of it can only really be measured from the likes of the listed holders of NAL and their own stake in the listed holders of NAL being namely Sayona and its multi board stock market listings. Because it is near impossible to post a gain on their other Nemaska holdings when they have no immediate measure of its' Asset appreciation.
" The key is to keep as much transformation as possible in Quebec," said the Minister. In this context, we cannot have a company (listed on disallowed). The new version will allow us to be more patient. "
Last year, Pallinghurst negotiated a potential investment of up to $ 600 million in the company, but that did not materialize. Mr. Fitzgibbon said the company's presence on the Toronto Stock Exchange was problematic.
This structure did not interest investors who studied the file when the company was safe from its creditors, added the minister.
“If the government had shown interest in keeping this structure (the stock market presence), the billion dollars that will have to be put in, we should have assumed it alone. I find that unacceptable. "
So for me , the restructure of NAL and the awarding it to the Sayona / Piedmont consortium bid looks more like the the best option for Quebec to return ALL its proposed investment in this sector - and Sayona is the one to lead the way in showing just how much better this way is given it's effective ' Dual ' and multi - listed stock exchange structure.
So for me , the really BIG move on Sayona's potential valuation is when the penny drops and Quebec sits down and has a re-think of how best to deploy the $1 billion dollars of additional Nemaska funding for it's proposed Lithium Chemicals conversion plant in Montreal.
So when I say ' Penny Drops ' , I'm referring to the one which assesses in depth BOTH the Molecular weight of spodumene as it relates to added costs as well as how it also relates to achieving significantly reduced and / or ' Carbon Neutrality ' on its ultimate production.
So we know that the molecular weight of lithium spodumene is approximated at 186.09 gm as compared to the molecular weight of Hydroxide which comes in at around 23.95 gm/mol . So that 7.77 times in molecular mass for spod versus hydroxide. Now if we flip that around , we might also say that Hydroxide is only 12.9% the molecular weight of Lithium Spodumene right.
Add to that the fact that Nemaska's Whabouchi mine as calculated at it's shortest distance route to it's proposed Montreal processing facility is actually is still 40.6% greater than that of going via La Corne and the NAL processing operations and HUB. T
Therefore , one could argue that its cost per molecular weight of its spodumene pre-conversion is 40 % greater or in fact more represented at 10.88 times that of NAL's 23.95 gm / mol for conversion of it's ' on site ' spod used , and only marginally more for its Authier spod which only has to travel some 38 odd kilometres ( if you consider barging over spod or Ice Road crossings of rivers in Winter ).
This of course would compare to Nemaska's spod which would otherwise have to travel a further 381 kilometres to Montreal on top of its already 617 klm's which it would have to travel to get to NAL's La Corne processing facility.
So not only is the Nemaska's transport cost of spod 40% more per cost per molecular weight , it therefore follows that it must also be significantly higher in terms of its carbon cost per molecular weight .....and so will never be the lowest possible competitive based cost nor will it be the lowest possible product produced from an net emissions and carbon footprint point of view.
So for me , if you are Quebec and are going to consider a ' FULL ' lithium HUB in its truest form , you must then consider the logistic's in locating your greatest conversion capacity in the most logical geographical location .....or Center of ALL or most of the in ground deposits.
So in effect locate your Investment in conversion facilities based on critical mass of resources and at the midpoint where the lighter weight added value of Carbonates or Hydroxides in achieving both lower costs and lower carbon as well as higher investment rates of return.
And the beauty of this is they are exactly in this position to have influence in this decision and just comes down to whether BOTH Livent and Pallighurst would agree with this strategy. Suppose that would largely be governed on their respective off-take contracts. And remember as well that Pallinghurst is also a significant holder in Quebec's Nouveau Monde's Metawinie Graphite project which proposes a processing facility at Saint-Michel-des-Saints which is 120 klm's north of Montreal and still 966.8 klms from Nemaska's Whabouchi mine. So again , that may not make all that much sense for Pallinghurst either. Even if they could process Lithium there as well.
So what I would be factoring in now, is the mid to high probability that the NAL's spodumene processing and conversion facility ultimately becomes the primary facility for further investment and processing of Nemaska's spodumene as well as others in the smaller satellite categories of JORC proven lithium resources.
So I am now looking for the ' Very BIG ' money to now come for NAL and consequently a HUGE mega tolling facility on top of its own share of the Final Products. This would no doubt offer - Faster pathway to Chemicals Production YES, PracticalYES, Best Logistics YES, Optimum Economic's YES.......is it Achievable ....most certainlyYESgiven Quebec is at the Helm of Nemaska as well as riding ' Shotgun ' with Sayona on NAL.
Therefore Ticks ALL the
YESboxes for the significant possibility of re-deployment of potentially C$ billion dollars of conversion processing investment .....
(20min delay)