Ann: Galan Investor Webinar, page-203

Stage 2 finance is likely impossible, and even if you get it, you’ve then got more complex financial management problems as you need to manage the operation costs of stage 1 at the same time as managing the Stage 2 build and Capex. How can you trust them to learn from their mistakes and do better if they haven’t outright acknowledged them and put in place a plan to stop the mistakes from repeating?

IMO if they get it over the line this will become valued on a PE 8-12x multiplier basis to match profits from stage 1, and Stage 2 growth prospects will be heavily discounted. How are they even going to fund Stage 2? I reckon the best you can expect is 5ktpa add-ons every few years. If this is the case then the relative valuation will probably remain poor compared to the rest of the lithium market.

If they could achieve a significant price for selling the project, they probably should have done it by now. That there hasn’t been any offers announced suggests that there is no buyer at a reasonable price. Unfortunately, the most likely buyer of the project, Arcadium, has pretty much laughed at the LiCl product and are unlikely to want to buy it.

There is plenty of upside if they succeed, however, the valuation gap exists for a reason and imo it will take years to unwind.