Originally posted by domum
Hi BJ.
It is a little disconcerting waiting on the sp to rerate AGY to what it should be, and we all have our own expectations on this so I won’t go into market cap models, valuations etc etc.
What I do know is that sp performance is a direct result of market dynamics or WHO shares r transferred from and to.
At the moment it is my assertion that we have had a major capper accumulating at 20c and POSSIBLY manipulating the sp down to that level, but really it hasn’t taken much effort with negative overall market sentiment compounded by Morgan Stanley et al bagging all types of lithium demand when it was blatantly not the case.
The reasoning behind the accumulation is most probably either a fund taking position or one of the many high risk fund segments or brokers that partake in such behaviour on the future expecatation of the company.
Just where they set their sell marker is anyone’s guess. But one can be guided by a general company valuation initially by project value (via a PEA or % thereof) and then P/E earnings.
So we have had recent 20c accumulation and that accumulation will be on-sold to buyers with deeper pockets again. It’s the nature of the market beast that substantial new buyers will have substantial cash which intimates larger funds or commodity associated companies that like the value of the investment.
Currently we r still in a project valuation (NPV) market sequence of which the PEA will give some guidance and imo will probably get us to around 50c at some stage depending on just how big the buyers want to spend and how many shares r on offer. The less shares on offer potentially the higher the sp will go. This is also complicated by Li sentiment and general market conditions.
From there it depends on full production timelines, and as the recent presentation pointed out JZ/Puna has late 2019 marked as stage 3 production start up.
IF, and it’s a big IF, AGY can achieve this project fast track timeline then the rerates may be a lot swifter than some think. This may be especially so if JZs US Cathodes trip pays off.
But more often than not these kinds of timelines r stretched duebto unforeseens.
What I do know is that AGY/PUNA have cracked on with pond development whilst continuing ALONGSIDE with the resource/process/plant development. They have nearly completed stage 2 ponds and will have brine in those ponds for the height of the evaporative season. Add to this the tight stage 3 timeline of late 2019 and all the annmnt hints of PROJECT FAST TRACKING and a much higher valuation may be attained a lot quicker that 2-3 years.
After all it depends on just how quickly we can get a new plant producing at 10KT/Yr and will we have the feed stock to do so.
I’ve digressed a tad havnt I.
Getting back to the sp moves, they r all ultimately intertwined with project developments and timelines as well as buyer/seller motivation.
This phase is the one that requires the most patience. BUT after over 20 years investing in mining small caps the pace these guys rvsetting is phenomenal. Once a mining spec initiates a PEA or scoping study it takes 4 Years plus to get to project construction/development. These guys have actually been able to develop a new process as well as get to initial stage 1 production, admittedly with one of the beat in the business, in what, around 2 years.
d.
They've been remarkably patient, too patient. By now they would have a controlling interest or at least become major holders.
I don't know, something else has been going on.
It's seems unnatural that AGY can announce...
I sometimes speculate that AGY royally pissed-off QQ after they pulled out of the OT agreement last year and they've been quietly plotting their revenge ever since.
Hopefully I am very wrong and by mid next week, the re-rate will be all but complete, and we will be +50% above the (famously conservative) MorningStar rating.
(20min delay)