Late Saturday night, in Brittany, France, and here are my latest thoughts:
1. The West Australian (Kerry Stokes) confirmed on Friday evening it was Gina. Good enough for me, particularly as Gina and Kerry are buddies.
2. ALB price has now been shown up as underwhelming. Trading @3.05, and with massive 'unhelpful' buying, there is no way Gina is working with ALB. Could not be less helpful.
3. ALB's boastful market presso on Tuesday suggests they were stealing the Lion at $3, and given their stated view on demand growth through 2030, this does not surprise. However, "Get stuffed". And as Joe Lowry says, they know nothing of mining, so are bringing little to the table. Their disparaging reference to KV as just another hardrock mine in development was most offensive- we are maybe 3 months away from completing construction of a Rolls Royce of Lithium mining, ffs!
4. However, Gina and Hancock know little of lithium either, or they would not have invested where they have (Vulcan). I was not aware until Friday that Gina already had 4.9% of Lion, but if she did, well done. The question I have is when did she first come to that realisation, and at what price?
5. Bottom line, we have both ALB, and the much richer Gina, wanting to invest in the Lion at $3 plus. Am honoured, but not surprised. There may well be others.
6. Someone said Tim and Gina are close, so no doubt he was aware of her holding and further interest. My guess is they are thinking of being joint strategic stakeholders in the Lion, and seeing this thing through. I will happily join them, and I suspect ALB will begrudgingly do so too. Many on HC will join, so, that is a most likely way forward, in my view. Lion has assembled a great team, together with Lycopodium and others. Not sure what is missing?
7. Reg from CG suggests that the $3 ALB price discounts our lithium @USD1,900. Accepting that this is otherwise accurate ( eg not sure he has put Buldania fully in his numbers), this is a classic Aussie stockbroker shorthand reference, and makes little sense as an aid to comprehending. given spod price volatility.
8. Given what I think is the clearly better view that market deficit through 2030, at least, will produce higher prices than current reference points of low USD3k, I want to see valuers using a curve, for premium KV spod, more like:
2024 - 3.5K (Lion might do 50%!)
2025-4k
2026-4k
2027-5k
2028-4k
2029-4k
2030-4k
2031- 3.5k
2032- 2k, until 2040. Then 1.5k long term.
Tell us what that result might represent in terms of LTR share price, driven by the NPV of early premium cashflows, given KV will be hitting the market on an up-tick.? If KV accelerates, we may run out of spod before it ever drops below USD1,900.
9. Not sure whether ALB will still proceed with its scheme, but if they do, or want to move to $3.50, I will next be watching for Lion's choice of an IER. In my view, Grant Samuel would be a strong choice, with a mandate to construct their own best price curve.
10. I still believe there is merit in getting this sort of unfettered valuation material into the public domain. Brokers are not incentivised to take such a purist approach. It might be money well spent.
11. Am guessing a result in the order of $5.00, with Buldania being around $500 million based on a rationalisation south of Kalgoorlie. However, the maths will be as they will be. Crucially, the maths will take no notice of what we all paid.
12. Of course, to many of us, such an arm's length value will include (shitloads of) tax, and like many, with Australian franking credits, our own potential post dividend values will be much higher. But that is another story...
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