Good conference call.
I missed it again thanks to a busy morning and messing up my WA start time, so thanks for putting this up.
Provided a really good overview of what is going on at Mt Cattlin.
When the books are laid wide open on how things are working its always a good feeling when it all makes sense and stacks up with what you’ve been reading, and how you’ve been doing the numbers, and then reading in between the lines for the potential upside - and then it gets delivered as expected - with a cherry on top.
AT still has his way of letting people work out their own potential upside figures and doing their own calculations.
He steadfastly provides only conservative guidance. Its his thing now. He owns that territory.
We have to stay one step ahead to get the most likely scenario.
All those running the more bullish scenarios of the numbers (and sp) have been the closest to the pin here lately.
He stops way short of promoting the real upside that the mine is looking at in 2018 from the upgraded circuits and recovery grades.
It just isn’t his style to hype it up to the nth degree, preferring to let people realise that even if the mine continues as is - with no further improvements to costs, pricing, production levels, grade, contaminants etc etc - then it is still an absolutely phenomenally valuable operation
capable of directing a good river of cash into the growth of the company.
That most of these areas will see significant boosts is the real driver of 2018’s upside.
Next year it seems they also have plans to process at least some of their own spodumene and convert it into carbonate for sale of the finished product.
That’s my take on what “well treated” means in this exchange.
"
So we’re valuating different opportunities with our customers, where there’ll be a portion of that material that essentially we would look to negotiate some arrangement to have our material well treated. So what that will essentially allow us to is for that portion that we would look to be well treated will have an ability to kind of capture a little bit of additional margin of the back of that as well beyond the concentrate margin.”
AT
I like that plan. I think it means we’ll all be well treated too by the potential increase in payments.
Its such a simple strategy but I haven’t heard it mentioned before. This is the best new upgrade idea I’ve heard for a while.
Much much simpler, and less risky than going into the converter business in China (again).
Sets up a situation where the independent Chinese converters can either pay top dollar for contracts or we can just toll through them.
OR a bit of both. If a converter can’t pay top dollar then it can just be rented out like a taxi.
At least that way they can stay in business.
Now that Galaxy has cash in the bank it can think more like a boss than a desperate-and-dateless junior.
Mt Cattlin has already been pushing through 5kt per week prior to the planned upgrades that should see increased production of 15-20%.
And they’re still talking about 200ktpa for next year. Very modest of them.
Always interesting how much you get out of the way people carry themselves.
I mean, it happens every day on Hot Copper too.
Plenty of posters and tweeters permanently and transparently short their own credibility.
AT is an impressive communicator, calm and considered, and there is a good sense of how many threads his multi-core mind can handle,
adding detail to previous questions and knowing when its best to let a stupid question reflect more upon the questioner.
(as more of you guys should be able to do on this forum…)
He handled the situation perfectly, able to add plenty of detail while also cordoning off the areas which are still going through intense negotiation.
Canaccord asked good questions.
That dude knew his stuff. It will be interesting to see their revised target price.
He was the only questioner that sounded like he had a mental mind-map of the Mt Cattlin operation and how the new pieces of information about grade, fines circuits, recovery etc all fitted into it.
The rest of the questioners were a bit hopeless.
“BUT- it was on Street Talk?! Why you no give announcement???".
Pity nobody asked about the LPD deal.
AT wisely decided it wasn't a great idea to spill the beans on exact Contract 3 pricing before he’d opened the can but it was interesting that a move to longer term contracts was also on the cards.
At some point things have to settle down and a set of specific clients will emerge as the best long term prospects for Mt Cattlin, particularly once SDV and JB are bedded down.
Perhaps those clients will also be good at "well treating" our spodumene too.
The Fairfax dude was alternately roasted for asking a stupid question and then served up probably one of the most comprehensive and impressive parts of the entire call
where AT spells out exactly why the share price has been rising.
Its the Fundamentals, stupid. Always was and always will be.
Doubts over the viability of Mt Cattlin and the lithium sector have been washed away by the constant stream of increasing production and profits.
Big Long funds, sovereign wealth etc etc. They all get that they are getting positions in a huge growth story and are getting in early with a 3 for the price of 1 at the moment for the other assets, topped off by with an impressive management team running the show.
Those same instos are now probably up another 1-2% of the registry from more retail getting Control-Alt-Deleted today.
Those who sold will smugly post and post and post and post about how its going to go down.
My advice is never brag about selling Galaxy. It has been a rocky start to Galaxy’s mining career but the fundamentals have never been better and their advantage in the market is starting to really get traction.
Look at LPD share price.
They know they’re dealing with a potential major now with some real credibility.
You just never know when another insto is going to rock up and want to build a position out of those shares you think you’ll find so easy and cheap later on.
Maybe. Maybe not.
If they’re cheap for retail - they’re virtually free to the funds.
They’ll be in again tomorrow.
I think that overwhelmingly my biggest take away of the conference call was that JB and SDV are no longer really in any doubt.
Seems they have benefitted a great deal from this last period of heightened media exposure and sky-rocketing lithium price and share value.
The Panasonic thing was blown out of proportion. They’re just regulars at the same battery producer’s club.
Galaxy is dealing from a position of strength and it doesn’t need to rush anything at this point.
SDV and JB are both going through the same early development stages that they would if they were fully financed and the partners can probably see that from a mile off. It only makes them more tangible and brings more people to the table.
Give this report a little time to sink in. Its all in there.
Its exactly what it should be at this point, and that is a very good thing.
Cheers
AC
