Banter and General Comments, page-6865

This is my understanding of GXY. Its long.
At the beginning of GXY 2. The company had a debt of 200m and no income. The converter in china was sold to Tianqi for 170m. Startup of MtC required cash in form of prepayments. The cash from prepayment and early profit in 2017 closed out the rest of the debt. The profit end of 2017 covered MtC costs, drilling for JB and SDV FS. With the new knowledge of SDV, the company sold northen tenements to Posco. Posco had been trying to buy a deposit but had been outbid by chinese government backed companies. Posco turned to Galaxy for a portion that Galaxy didn't need for 280m. With the profit from 2018, the company reviewed MtC and built the YOP for 30m. The reminder went to developing SDV and JB. The tax for the 280m is around 67m, hedging has saved around 15-20m. Of the 280m, the total tax now stand at 40-50m. With q1 profit, leaving around 230 to 240m US in the bank. The company is engaged with the Argentinian govt at federal and provincial level to reduce the tax even further, since the company is reinvesting the tax saving back into the country. This process is currently underway.
SDV is 4km above sea level and 6-7hrs to nearest town. Development for SDV will need to be on site or prefabricated. Posco is in the same position, its likely they will share infrastructure/facilities with Galaxy.
Posco has spent 280m and another planned 1b to obtain LCE chemicals. This means the value of Nth SDV is worth more than 1.28b to them. GXY SDV is twice the N.tenements. All sounds good, but only if the chemicals are extracted. In Jan there was heavy rainfall, if the 15 hectares are lined and filled in July, thats a total of 6 months. Evaporation will take 12-18 months. Results will be known mid to end of 2020 using conventional. The company is testing three alternative techs while the formal method is being done. Using alternative methods may only take 6-8 months for results. The company has said the results will be q3/4.(around sept). JB is waiting for approval.
MtC cash cost was 319 in april. With increase in production for the rest of year this should fall further. The grade is %, quality is purity. Both are up as well as output.
The alternative methods work. Hydroxide filtration systems are use on the space station. Tesla is working with NASA. Tesla need batteries and Panasonic need chemicals. Panasonic has not reach near capacity. No further investments from Tesla until it is. Tesla giga3 will obtain chinese made batteries.
The h1 price was negotiate at the beginning of the year when spod prices were 800. This price remain for all spod sold in H1. Minus $10 for every 0.1% from sc6.
GXY spod prices are not the same as peers, AJM contract price is based on spot only with a floor price of 550, 600 is for q2. Pls is getting the same as AJM. Their average for H1 is around (15%) from dec 740 price. A40 has a floor of 680.
A40 and GXY h1 average will be above 740. The spot price is only part of the matrix pricing, the contract price cannot fall the same as spot. Adjustments of around 10%. Ajm spod cannot fall belw 550, A40 680. That is contract floor. Not all spod are equal.
The slowdown in china began mar/apr 2018. Long before any tariffs. The boom in properties around the world saw cash moving overseas. The Chinese govt, placed restrictions on cash leaving the country. This put pressure on small operators obtaining US dollars. Trump is acting for American farmers and businesses. They asked him to place tariffs. 500b US leave America into china each year. All imports into china is restricted.
Chinese pharmaceuticals can come to Australia but they don't allow Australia goods to enter china freely. About time someone stood up. There was never going to be a tariff on Mexico. Trump wanted Mexico to stop the border crossings which costs americans. Mexico has sent in border guards and got free trade.
Ev demand has outgrown all expectation. The reason ICEs sales are down is because people have put deposits on an EVs. Aus post are now using Ebikes. Chinese sales of EVs have been high, but the battery size average only 230km. Subsidies are now available only for makers above 400km. If chinese Evs sale remain the same going forward, the chemicals need to double. EV subsidies only go to EVs using chinese batteries. Korean and Japanese don't get subsidies. GM and Fiat need Tesla to remain in business through carbon credits. They pay over 2b to Tesla. Tesla was reported to go broke at 4000 units, they now producing 360-400k units. By 2021/22 EVs will be at cost parity with ICEs.
EVs are not cars. They are computers on wheels. A 30-40 minutes download update the vehicle. Gigafactories need converters, converters need mine supply. The current mines cannot produce enough. All major autos will enter the EV market in 2020/21, there is 12 months lag time. Many converters in china sit idle because there's not enough funds to operate or buy spod in US $. Converters upgrading for the upcoming demand require huge volume from second half.
Galaxy management need to move their backside to meet the upcoming demand instead of talking 2025. Worry about the next 5 months instead of 5 years. Simon is a mover, lets hope actions and communication improve to reward retailers.