That's pretty much already been explained Mondy. And it's as much about RETAIL supporting as it is about LARGE RETAIL holders HEDGING their positions.
And why wouldn't you HEDGE if your parcel size was anywhere from 3 million shares up to 10 or 12 million shares. With the amount of shares on issues together with the various tax jurisdictions and timing PLUS the mere fact your early cashflows are linked and leveraged to virtually ONE singular project at the current moment.
Add to this the various more ' speculative ' uncertainties which still hangover the Stock .....tlets call it the ' Wherewithal ' effect. Why wouldn't you shoes to hedge 8 -10 % of your position . So long as you're not losing badly by this hedging activity , you could think of it as insurance until the ' Wherewithal ' issues are put to bed. Hence the reasons there is ONLY limited downside as displayed by the very tight trading patterns for the better part of 4 months now.
However , sticking with the Winsome - Patriot - Vision Lithium example. If we use the built-up ' Kinetic ' energy and Physics properties of the ' Sling Shot ' analogy. There is only so long that the rubber band can be pulled before the release of this energy before the band actually snaps or gets released.
So if we liken the Investor Interest in say Winsome , Patriot , and others as the bands being pulled back , there is only so long before the inertia and kinetic energy of the LARGER object being launched at some multiple of the force which accelerates and expands. So in the slingshot analogy , the bands themselves continue to release some of the kinetic energy , but the greater amount of energy release is represented by the ' Catch Up ' and acceleration of the LARGER object.
So Sayona in this example is the ROCK , and the others which have been in part further stimulated by Canadian Tax incentives as well as the general attraction of new Capital being driven by a Growth Industry and future supply deficits - The reality is that you CANNOT have the ROCK reverse and FALL while the BANDS of the slingshot are being pulled back anymore than you can have the ROCK reverse after the BANDS are release and being to slow down themselves.
So loosely translated , you CAN'T have the Sayona SP drop when a.) it is doing ALL the right things as well in terms of future exploration and spending , or b.) the other peer ' Bands ' of exploration are being stretched and expanding before their release and rising to extraordinary heights
So you can have the bands continue to increase , but you CAN't have the larger rock fall while this is happening because the discrepancy in valuations then become almost un-explainable and unsupported given the reality of the underpinning Physics of Investing by the ' Numbers ' . Same thing applies when explaining away the differential and discrepancies between Sayona and its larger peer Lithium near producer in Sigma Lithium.
What is more likely to occur here is that Valuations at the smaller end will continue to rise , and the LARGER near producers in the same jurisdictions will have their own ' Catch Up , and DOUBLING in value to say around $4.5 - 4.7 billion in Sayona's case. Either that or the Slingshot will miss-fire and the bands will snap and fall away while the stone only drops a short distance back to the ground under the force of ' Industry Wide ' Investor gravity.
To illustrate this a bit further , and without getting into the ' Geological ' nitty gritty comparisons of say Sayona's FIRST market mover ground versus others , here are some Illustrations and statements taken right from the horse's mouth and the Government of Canada / Gouvernement du Canada
After reviewing this , you should at least begin to see the BIGGER picture as to why this jurisdiction should attract a certain intangible premium not measured by any PFS or even DFS , and why current values are the way they are , and where they are most likely to go.
And there is a LOT here like I have said before as to WHY the Moblan ground and the actual MOVE on it by Sayona is so important. However , my CHAPTER 2 or 3 is still in the print review stage so I'll leave that for the present moment as there are FAR more other items of business which have just ' Popped ' up like Lithium Chile Inc and / or Edison Lithium Corp.........
Here are some of the supporting factual statistics as reported by the Canadian Government with their accompanying explanatory charts. We can start by the Industry Graphs which you can clearly see the Trend since the last major dip as well as the previous high's back around the GFC.
You can also see by the below Map that Quebec features prominently in the ' Other Metals ' category as well as the HUGE growth potential in this category as compared to the Precious metals category which includes GOLD and SILVER .....which we now have 9.26% of one of the LARGEST in Gold ( Troilus 2nd largest in Canada ) , and the THIRD or FOURTH measured in estimated reserves in Silver ( Troilus ). No wonder Eric Sprott has taken a liking and has a stake in this Company as well right ......
In 2021, 37 of the 63 active lithium projects were located in Quebec.
Spending on exploration and deposit appraisal activities for other metals rose by 167% in 2021, reaching a total of $95 million, and is anticipated to increase by another 77% in 2022 to amount to $169 million.
Expenditures by junior companies reached historic peaks exceeding $2 billion in 2007, 2008 and 2011, but fell to a 12-year low of $578 million in 2015. Spending started to recover in 2016 and surged by 70% in 2017, reaching a total of $1.1 billion. It remained at the same level until 2020 before almost doubling to $2.0 billion in 2021.
In 2021, the number of junior companies increased by 13%, to 612, while their combined spending increased by 86% to reach $2.0 billion, a 10-year high. Spending intentions reported by junior companies indicate an increase of 8% in 2022, to $2.2 billion.
In 2021, junior exploration companies accounted for 76% of the active projects in Canada and for 82% of the project operators.
Other key indicators of sector activity were on an upward trend in conjunction with spending between 2020 and 2021:
- The number of projects, which increased by 13.4% (from 1,793 to 2,034)
- The number of companies, which increased by 11% (from 667 to 743)
Surface diamond drilling increased significantly by 66% in 2021, from 3.7 to 6.3 million metres, as a result of an increase in drilling by junior exploration companies for precious and base metals.
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