LITHIUM
Lithium turns WA into a millionaire factory
Sean Smith
Sunday, 14 January 2018 9:00AM
Sean Smith
Lithium turns WA into a millionaire factory
1:17 | The West Australian
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Finance News Presenter Meilin Chew says WA is in the driver’s seat to power the new lithium battery world
Pilbara Minerals director Neil Biddle jokes that he has never been so popular. The emerging lithium company is on a record run, this week cracking a market worth of $2 billion as shares, which were fetching less than 5¢ three years ago, hit $1.25.
The wealth windfall translates into happy shareholders, particularly among the scores of Australian retail investors catapulted to millionaire status on the back of their Pilbara shareholdings.
Mr Biddle, a veteran geologist and mining executive who took Pilbara into its flagship Pilgangoora lithium project in the Pilbara four years ago, thinks there may be 40 to 50 small investors on the register with a million shares or more, a legacy of the company’s equity raisings at rock-bottom prices when it was struggling for support.
In November 2013, Pilbara raised $750,000 at just 1¢ a share, topping up seven months later with $920,000 at 1.5¢. As late as June 2015, it tapped the market for $6.5 million at 4.5¢.
“I’m aware that there are a lot of shareholders still there from 1¢, or at least holding part of their holdings,” Mr Biddle said.
“Some have sold, but others have held in, true believers in the lithium story.”
Neil Biddle has seen Pilbara Minerals soar on the sharemarket.Picture: Robert Duncan/The West Australian
Mr Biddle, Pilbara’s biggest individual shareholder ahead of fellow director John Young with 33.2 million shares now worth $39 million, credits the company’s ability to source cash during those tough years to the reputation of Pilbara’s then chairman, Tony Leibowitz.
“Tony was very well connected in Jewish communities around the world and he was able to raise money for us mainly from people who didn’t know anything about resources,” he said.
“We were able to keep the company funded and keep our foot to the floor on exploration at a time when other companies were pulling their horns in because they were unable to raise money.”
Mr Biddle says after touring China, the company took the view that the momentum in electric batteries, in which lithium is a key ingredient, “was much bigger than most people in Australia realised”.
“The Chinese were gearing up on a massive scale, mind-boggling really, building these massive factories for batteries,” he said. “We were believers from the very early days, because we saw it firsthand.”
Pilbara chief executive Ken Brinsden notes that it was not alone among lithium companies in generating significant wealth for early backers. But he says in its case mum-and-dad shareholders saw the opportunity in lithium before institutional investors.
“So you really have to hand it to them for taking a punt and accepting that there was significant change going on, picking the theme early and making some decent money out of it,” Mr Brinsden said.
The lithium boom has also enriched investors and management at Galaxy Resources.
A strong gainer last year, Galaxy is among the S&P-ASX200’s best performers so far in 2018 with an 11 per cent rise.
At yesterday’s close of $4.24, a company which nearly imploded five years ago on corporate issues and operational problems at its Mt Cattlin project near Ravensthorpe, is now worth $1.7 billion.
Galaxy’s register was tightened through a one-for-five share consolidation in mid-2017, so the current price compares to an equivalent $2.66 at which it last raised equity last February.
The beneficiaries of its run include chief executive Peter Tse, whose 4.7 million shares are worth nearly $19.9 million, Russell Delroy’s Marford Group with $15.2 million and mining investor Michael Fotios, who has been involved with Galaxy since its foundation, $10.3 million via his Investmet investment vehicle.
I guess they will have an article on joe walsh and us in 2 years time haha. Glta
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