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Galaxy: What I'd like to see..., page-41

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bobsacramento

1,202 Posts.

40

09/06/17

13:30

Post #: 25197393
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Originally posted by airconditioner ↑

What I'd like to see..

Agree with Baba.
No share buy backs necessary. Valuable profits put to growth is best.
Dividend - perhaps. It would be a tiny one so inconsequential either way.

Prefer to see that Galaxy (and its shareholders) just tough it out.
You can't "out" shorting funds. Its against the Fight Club rules.
You just take your punches and get on with the job.
The market turns on a dime around here and the same funds can be the ones to pivot into long positions
in the course of an afternoon.

Most of all I'd like to see the accelerator pedal floored.
Galaxy is in the rare position of banking good litho-dollars.
This last shipment is the biggest so far. Takes the space of 2 berths at the port.
This cash and their presence on the deal-making circuit means they must be getting approached by dozens of minnows for deals
and moving in the circle of the billion $ production club.

I'd really like to see Peter Bacchus doing something more productive with his M&A chops than renting his legal skills out to LPD.
If we are to take advantage of first new company to production let's see some aggressive action to put more distance between us and the rest of the pack.

I think there are 2 most logical and interesting options available.
And this is simply from my own very limited potential to "see over the fence".

One is a take over of Nemaska.
They're $400m MC with a Canadian mine under construction and a hydroxide processor starting to produce product from temporary crushers. That is a working vertical operation within 6-9months.
Mt Cattlin profits are put into building out the Whabouchie mine plant with Galaxy engineering and operational guidance, which NMX is lacking. They provide the processor. Galaxy may even be able to assist here as its run a very good one at Jiangsu before and hold some good ip and plant automation skills.

Pros - double to triple profitability within the year. Picks up valuable hydroxide processing IP which could then be used at Mt Cattlin.
Cons - 200m shares issued. Market throws a hissy fit before realising that Galaxy has again doubled its scale of operation and added in vertical integration. Direct hydroxide production means they are immediately dealing with battery plants without Chinese middle men.

JV with FMC on SDV.
FMC would have to spin off their neighbouring lithium assets at Salar del Hombre Muertos as a separate entity.
This has been rumoured already.
Then they go JV with Galaxy on SDV.
Galaxy supplies the obvious expansion of ponds and capacity and brings in a new team to reinvigorate the FMC operation, that seem to have lost direction.
Half the Galaxy team have FMC connections already, including the boss Dr Mehta. There is already a hydroxide processor there. Galaxy puts cash into ponds and scaling up the processing plant.
Pros : Skips the most expense capex outlay on processor and provides immediate production revenue, immediately moving to scale up the entire brine operation, plenty of other synergies too as they are already neighbouring operations.
Cons : What is in it for FMC? Difficult to predict the actual details of the deal. FMC have the asset that Galaxy wants (access to the processing facility). It could be weighted too heavily in FMC's favour if they gain 50% of SDV's future profits instead of Galaxy going it alone and building their own.
At the very least a tolling arrangement could be struck where GXY rents out hydroxide processing capacity as a first step to production and lets SDV begin paying for its own processor.

One last thing about both these possible relationships is that NMX and FMC are already closely aligned and linked by an offtake deal.
If management of all 3 companies could sit down right now, they would realise that between the 3 of them they have a new massive major, with Galaxy the one that makes it all make sense by having neighbouring assets to the other 2, and already making good money with an operational spodumene mine, capable of injecting good capital and experience to accelerate production across the board.

And I'm just sitting here in WA.
These are only a couple of things I see as possible growth strategies without having had the chance to listen in to the Montreal meetings that Galaxy had over there.
Something has kicked off a little shake down for shares and I'd like to see what happens next.

Expand

Interesting post as always.

However, the first rule of fight club: there is no fight club. You can't break this rule! C'mon AC, you know better than that!

GXY Price at posting: $2.02 Sentiment: Buy Disclosure: Held
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0 Great analysis

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