@h00ts ...."The battery makers will be gearing up for the wall of demand heading their way years before 2025, so the broad expectation is that the lithium sector will come out of the trough around 2021/2022.
That’s light years away for equity markets, hence the pain being felt in the sector right now."
Exactly, there is the other half of the story, that being large players setting themselves up for the longer term. With ALB buying half of Wodgina, No WES (or whoever) buying half of Kidman, they are not looking at the next 2-3 years, they are looking way beyond..
There are big fish out there looking to buy up cheap assets for a decades time, so it is obvious to me that if there are 2 big fish nibbling at KDR then whoever misses out will be looking our way (PLS).
Before people start asking why I hold with the short term 'bearishness in supply' attitude, it is the long term we need to be keeping an eye on. The shares I have in PLS I bought cheap, and at some point we are likely to get way too cheap for the asset in the long term, but when is anyone's guess.
I do have a price in mind of around 35c (based on TA and FA), to buy as many as possible!! Basically because by that price we are an outstanding bargain for the asset. That also seems to be the area where the shorters are trying to push us down to.
My suspicion is that getting us and keeping us that low for a period of time is part of a plan to launch a T/O, and hopefully pick up the company for around $1b. Of course the business side of things is helping (them) with low spodumene prices etc.
What can PLS do to weather the storm?? My own suggestion would be to do a rights issue to pay off all the debt and fund the rest of stage 2, so we have a really low cost, plus look at getting piped gas to the plant, again to reduce costs, so we remain viable despite low prices. I also wouldn't mind if we did sell 50% of the mine and spent the cash on not only on hydroxide conversion, but also a part share in a battery factory.
IMHO the large lithium resources are what the big fish are eyeing off hence the run in LTR that might have a very large resource with further drilling.
There is no doubt that WA explorers and miners do their job very well, better than the rest of the world IMO.
(20min delay)