New Macquarrie projection, page-16

Oh no, not again….

Okay….MacBank will probably be the only broker that will have PLS falling in the next 12 months. It looks like PLS really did get right up MacBank’s nose!!

I will guess that you have not read the numerous threads over the last few months about the MacBank report into the lithium sector. Many people (including Joe Lowry) berated MacBank over their demand assumptions and for MacBank to suggest that there will be an oversupply of lithium in the next few years smells of a lack of research. I consider this to be irresponsible by MacQ, as many ordinary people give weight to the opinions of the financial sector.

I agree with SOS (and others) that if you believe this is disruptive technology then the only way to compare this is with other disruptive technologies (e.g. computers). Both demand and supply sides can be difficult to determine and almost always are wrong.

I’ll just highlight a few things that favour PLS being above the MacBank 40c target:

1. Access to the second largest hard rock deposit in the world (if not the largest)
2. Commissioning of a mine in about 12 months.
3. Ability to raise large amounts of money to pay for the construction of said mine (e.g. $100m)
4. Resolution of the dispute with MRL and more BOA’s coming on line.

For me, the acquisition from DKO looks like a good strategic move and appears to solve a problem or two. Hopefully the MinRes situation is solved sooner rather than later and management will have one less issue on their plate.

Enjoy your weekend, TCS