AJM Chart, page-2459

A very good week that indicates we are more than just on the right track.

After the mid year closing out for Jan 1 2018 our opening week saw a 20% gain off the back of NO NEWS.

What had changed?

The shorters were still out in force (and would hopefully come away scorching on Tuesday and Wednesday). Manipulators were still there from the frequency of sub $100 trades. Fundamentals were the same. So why the big rise?

My thoughts are as follows:

1. A new investment phase that will not close out until either 31/3 or 30/6 depending on the reporting cycles. It means the bigger funds may just be having a closer look at Altura.

2. Increasing prices for both Spodumene and Lithium Carbonate is pushing the price (noting our cap for the first 200kt of production is US$950 but any extra and especially expansion production will not be fettered in the same way.

3. The pictures coming out of the site so rapid development. Production is due for this quarter and sales for the next. The ore is already out of the ground and awaiting full commissioning. There is the potential sales could occur sooner than expected.

4. Our current MC is around $861M. This currently would put us in the ASX200. Altura is larger than the bottom 16 ASX200 companies as at 1/1/18. That does not mean we will be included as there will be other companies also making gains and vying for inclusion. Given we don't know what will happen before the mid march reappraisal merely sitting at this level may not be enough. My previous thoughts were a price around 60c would safely see inclusion but I am not thinking it would be more like 55c. That sort of price would see our MCat around $1bn. Smart fund managers may be able to get an early start on a company that will leapfrog the ASX300 straight into the ASX200. For a little perspective, the bottom 23 companies in the ASX200 have a MC of less than $1bn. A MC of over $3bn is required for the ASX100. $9bn for the ASX50!

Still, this is a lot of conjecture. What does look clear is the rosy future for a company that is selling spodumene concentrate. Bring on the next ten weeks and I will be very much looking forward to the ASX rebalance then. In the interim, I will be hoping for a MC around $1bn and the additional security and growth that will bring.

GLTAH

PS. I also note the Beer target of 63c would give Altura a MC well north of the $1Bn mark. Their targets sometimes take a bit of time to achieve (and sometimes not too!) so reaching this and maintaining it in the very near future would be a real bonus.