GXY (ASX) See you guys at 65

Originally posted by ProCapitalism: ↑

I would have to agree that GXY will have to go into survival mode.

One way would be streamline her business model & focus on their core income, mininglithium.

Develop SDV, expand Mt C, sell everything else, period.

I think GXY should dump her stake in LPD. LPD is a specky stock with an unproven tech for refining lithium. Even AC, in the past, has posted his scepticism about LPD as well. With over 5 billion shares on offer & an almost certain SP consolidation on the cards plus the potential for more shares on issue to flood the market, it will quite easily dilute GXY holdings in the company destroying our much needed capital to develop SDV. GXY holdings has already been slowly diluting looking at the recent anns.

Partnering up with a current proven refiner like KDR has would be a smarter option if GXY is so inclined.

The lithium downturn isn't going to getting any better for the foreseeable future, we may have to prepare for a downturn that may last for years which means only the strongest companies will survive. China has cut back on subsidies used to purchase electric cars, global trade problems & a slowing global economy means we need to hunker down for a while.

Blowing capital willy-nilly on hopes & dreams isn't an option at the moment IMO, we need to slow the cash burn. The SP is telling us investors aren't happy with the current business model so let's take note & adjust our angle of attack so to speak.

Selling JB is another option for GXY. Very expensive to develop & maintain & half a would away in a frozen environment.

We have a larger foothold on SDV! A massive resource that has the potential to power us along for the next 30+ years & Mt C will keeping things ticking over in the meantime. What are we going to do with all three sites (2 relatively undeveloped) & current investments when our account balance hits zero? Start racking up debt?

Once the global turmoil blows over we can reassess the situation & change our investment strategy.

Let's be a company that can adapt with the markets. Do we want to be the next Blockbuster or Kodak, along with many other companies, who failed to see the changes in the market & became obsolete?

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KDR gave away half of a Tier 1 resource to SQM for US $110 million. That is a terrible example of what we should do. The only winner in that scenario was SQM. Thankfully for KDR SH (myself included), WES was desperate to get into battery minerals and launched a successful TO of KDR’s remaining half for around $776 million.

As for liquidating the LPD investment, correct me if I’m wrong but isn’t that currently only worth around $5 million? That won’t even make a dent in the capital requirements for SDV, so it’s not worth worrying about IMO. Still, it’s not GXY’s worst investment, still up 70% from the SPP.