I'm here mate. Have been the whole time.
And never a dull moment in the Investing World. Especially when you're dealing with the Sayona HC forum. But that's the beauty of this business isn't it .....
And on that note , I'm not entirely convinced that the blame for the leak should be put squarely on Sayona , and so I reckon the BOD bashing is not entirely justified. Because its more a case of that's just how this Business of Stock Broking and Analyst's research and interpretation plays out.
I mean , in the absence of any particular euphoria emanating from the Market backdrop overall , there has been a certain ' BUZZ ' about the Lithium Industry and its now FOURTH apparent resurrection from price downing gloom. convinced. Someone mentioned it being the 2nd ' Boom Bust ' but if you're really counting , it's been 4 times since 2013 - 2015 , 2017 - 2019 , then 2020 -2021 COVID inspired supply chain disruption hoopla to now what looks to be the 2022 down to 2023/24 projected revival. At least Mckinsey & Co. believed this to be the case from their January 2023 Battery 2030 report titled " Resilient , sustainable , and circular" which followed their earlier comments on the industry in 2019 which claimed the entire supply chain Lithium Industry would grow 30% year on year from 2022 through 2030.
Interesting as well that from my last recollections , McKinsey & Co shared the same Melbourne tenancy address at the Paris end of Collins Street at No.1 with our very own 10th ranked Global capital raising funder in Petra Capital . But that's just by the bye.
I guess once word gets around it can virtually travel right the way down through Collins Street right ....
?
And like Split has mentioned , they had been doing an increased number of road shows and investor preso's leading up to this . So it's not as though the Investing community was not wise to it - even though they reacted in much the same surprise with the two day strong reversal. Heck I even got an ' Invitation ' sent out to me from one of my Broker contacts on the 11th May( refer email excerpts below ) to participate virtually in a specific Lithium Q&A . Notice the date at which it was even forward planned being the 6th June. Could this date be just a simple coincidence that far out. Something tells me I don't think so.
So the Investor community given all the surrounding BUZZ of LTR takeovers , Allkem / Livent amalgamations and the like would have pretty much been expecting it. And in many ways , I had wondered if that timely drop o the Moblan MRE increase ( which included some economic PFS styled guidance) , was in fact motivated in part by a ' look at us ' and what we SHOULD be worth in a sense of being our own ' Target ' by a much BIGGER circling fish. So the best defense is always putting yourself on the offense with respects to declaring your hand with potential ' Growth ' . And I feel as though that is what Dougal's rhetoric all those months was also about with the references to Moblan's size as well.
And I have seen many instances where a Company undertakes its own capital raising as a form of ADDED defensive posture as well. Because once you have the capital and the growth plans laid out in front of you , it becomes increasingly harder for the perhaps unwanted predators who may be circling you at these times.
At the same time , I am equally surprised that until Mondy's comments , NOONE had picked up on the cashflow movements from the last quarterly statements. Because indeed , if you work back the closing cash figure to December 31st 2022 and account for BOTH the exploration and corporate and admin expenses , you will find that without the 54.955 million ( less fee ) from the flow through placement you would have had virtually NIL
left in Cash on Hand on a continuing basis at 30th June 2023.
However as some have already said , this isn't so much as a result of production cost overruns per say , as if you look closer into it , you'll find it's more about the fact that BOTH I.Q and Piedmont aren't paying their joint venture share of costs on a per quarter basis and more at each HALF year mark.
So there is a fair bit of JV charges outstanding by my calcs , with most of the $12.427 million being received in the March QTR relating to the December HALF. Even Piedmont refers to this in its half year accounts.
So as I have said previously and many others have concurred - Its ALL ABOUT the TIMING of these matters , and everything seems to be pointing to the fact that the best timing is NOW.
But if we just allow ourselves to be a little bit more contrarian than the usual contrarian's , up until the 10th May the stock had clearly been under continuing shorting influence with perhaps a wee bit of covering coming into play. However on the 11th May ( there's that magical date again from my Broker Invite ) , the clearly turned up closing at 21.0 cents after hitting the MAGICAL price of 22.0 intra day high. Now you can go back all the way to last year to many of my posts where I referred to the 22.0 - 22.5 cent a key price point after calling over a month in advance the SP run to 39.5 ( almost 40 cents ) . So 22 - 22.5 was ALWAYS in play just as 18.0 cents had been as well.
So there should be no surprise here that they are reverting back to this price point given the exact same size of raising , and to the exact type of Investor they are pitching to. But just sticking with the ' Contrarian ' view for a minute. Since that crucial inflection point on 11th May , we can see that roughly 400 million shares had traded on just the ASX since then to the now trading halt. Prior to that and since the 17th April , another 600 odd million had traded in the range of 19 - 21.5. So that's roughly 1 billion shares - Just on the ASX.
So let's continue to assume that the 'covering ' was indeed just starting to occur which can be actually supported in the somewhat reducing numbers. And even State Street's last ' Ceasing ' notice had actually occurred on the 19th of May when the alleged covering actually was in motion and the SP peaked at 23.5 cents. So in actual fact , if the market reacts in its typically expected fashion of retracing to capital raise pricing , its pretty hard to take out new short position which benefit while the stock is retracing quickly. So that leaves the decision for the shorters of what price should we actually commence their covering strategies. However the FIRST tranche stock doesn't actually hit the markets until Tuesday the 6th May being the ' Expected ' date of allotment. The SECOND tranche doesn't even hit the market until ' settlement ' on 19th July just over 1 week before the 40 million 15.0 cent Director Options expire on 28th July 2023.
So there are also these 40 million 15.0 cent Directors options which come into the calculations of setting an appropriate raise price and which need to be factored into the ' Optics ' of what's likely to play out following the closing of the second tranche and shareholders meeting. which also had to be taken into account as well.
And so with respect to these , it is interesting how as an investor you can find the ' Bitter Sweet ' aspect of anything that is thrown at you. And I guess that is your job really . To analyse ALL these things regardless of the downside risks , or in light of the potential upside benefits. To try and then predict the movements after ALL your work becomes the more tricky part of doing your job.
But to throw the baby out with the bath water after not comprehensively considering ALL aspects would simply be knee jerk and stupid. But that's what markets do right .....
So the Market in Sayona script has a week or so from Monday before these first 940 odd million shares come on stream and are available for trade on the ASX. So my guess is that it will dips and then oscillate , perhaps even gong up before on account of a combination of potential news release items ( favorable ) , some additional short covering actions ( favorable ) , and general support and additional Investor interest at the perceived support levels and potentially larger volumes transacted ( also favorable ). The negative is simply the perceived sentiment about capital raising expected retraces with the potential combination of the 3 positives potentially offsetting or even outweighing the perceived market sentiments surrounding raising's more generally.
So the news relating to Crawford can be seen to be ' Bitter Sweet ' as well. Because at 22nd March 2023 or the last Top 20 Crawford was just in front of Troilus with his 148,503,397 shares for 1.67% , and so it will be interesting as to whether he losses or converts his 20 million directors options at strike price of 15.0 cents prior top him ' losing ' them after his resignation becomes effective at 20th June 2023. Bitter because of the potential effect his sale of securities may or may not have on the stock overhang . Will be interesting if they do a block trade at the same 18.0 cent cap raise pricing to a future strategic partner in July or sooner.
But its sweet because we will now be shopping for a new CFO with perhaps a Canadian Tax & Accounting bent. I understand Frontier's CFO Tony Zheng just left which coincided with a significant price correction in their SP . However in their ( Frontier's ) case , they had another well qualified Director in John Didone who is a qualified CPA , CMA & CA and previous partner at SRWC LLP who could slip right into the role and was based in Sudbury as well.
Who knows who we might get. And while purely speculation at this stage , maybe even someone of the ilk of Jacques Malletes credentials and past experience through his connections to BOTH Raymor Industries as well as Nemaska might pop up in filling an operational BOD & Director role at Sayona. After all and while we are an Australian Company operating in Quebec , we have no real Canadian BOD experience reflected on our BOD . So to be recognised internationally , I reckon we should have some North American representation. Especially required if we go down the path of a dual Canadian listing at some stage. Anyway , his ( Jacques ) credentials can be seen in the below extracts.
It's an interesting position with regards to Crawford though. One which I'll be watching very closely as we head into the shareholders meeting on FRIDAY 14th July because ideally he would want to hold off until 1st July 2023 ( being the NEW tax reporting year ) the sale of any of his ordinary shares which at 18.0 cents would net him some $25 plus million.... to then exercise his 20 million 15.0 cent options before he effectively ceases to be a Director which would obviously be ' Pre ' end of financial year and before his tenure as a Director ends.
So effectively to defer his recognition of his $25 million to effectively take up his additional 20 million Directors Options at 15.0 cents.
In either case, if he takes them up , it effectively endorses or ' underwrites ' his belief in them at 15.0 cents and the subsequent profit which will accrue from doing this. And if he acts in any way prior to his resignation on 30th June , he would still be required to report these moves which we may not find out until several days later in July if he chooses to do it on the ' Death Knock ' of the financial year. He's cheeky enough to do it this way , but if he has to sell any to achieve the take up of the options , we should easily find this out prior to the financial year and get a good picture of what he is doing and what perhaps he is thinking. It will be equally interesting if Brown and Buckler then take up their combined 20 million as well by the end of July 2023 when they expire.
Just while we mentioned Troilus in the same breadth as the Top 20 . As at 22nd March ,Troilus was indicating a holding balance ahead of Crawford of 144,331,707. However in Troilus' accounts ending in January 2023 , they reported the FULL 184,331,797 shares they received in Sayona for the circa $50 million transaction for the ' Troilus Claims ' in Nov 2022. So obviously by the 2nd March 2023 , Troilus had jettisoned some 40 million shares even to end with their 1.62% holding balance in Sayona. On closer inspection we find that Troilus had actually reported that they had sold 20,238,400 shares at a price of 19.28 cents for proceeds of $3,923,044. I assume these figures are in $CAD as they are forming part of their accounts , and so reported a loss on this component of their investment of $468,688. This means they had to have sold another 19,761,600 shares between 31st January and 22nd March 2023 at prices ranging from 20.5 cents to 28.0 cents ( so higher ) , and that their initial sale must have occurred at dates between the 4th and 6th of January before the SP ticked up and whereby they reported an unrealized gain of C$4,500,425 on their remaining holding balance at that time.....a gain which would now be virtually wiped out at prices at A$18.0 cents or below.
I guess Troilus can be forgiven for this as they clearly needed the cash with only CAD $1.585,215 in cash & cash equivalents at 31st January 2023...but a staggering C$15,236,625 in tax credits receivable on only C$3,829,901 in Exploration & Evaluation expenses for the 3 month period to 31st January 2023. So you can see by this that there is a ' Lag ' effect from when you incur your eligible exploration expenses and when you actually receive the credits back from the Government. This will equally apply to Sayona as well where we were also owed some $5,809,385 of GST/VAT in the year end accounts at 30th June 2022 , and only received $5,366,856 in the December QTR ending 31st Dec 2022......so 4 to 6 month lag from time of submission to receipt.
Anyway it's interesting talking about Troilus and surrounding area given at least one of the comments in the latest $200 million raise announcement. Particularly in light of the fact that Troilus's remaining investment in Sayona is equivalent to virtually 20% of its current Market valuation at its last traded price of C$50 cents or C$113.35 million market cap. So it would seem that they ( Troilus ) are indeed very dependent on Sayona in that respect. Whether its required cash or liquidity , it would seem that further tie - up with them is almost inevitable if you consider Sayona's need for existing infrastructure and Troilus's need to collaborate by offsetting its own development costs in its manner.
And one only has to look at the below paragraph to wonder what it is they are actually referring to when they say in the same breadth mentioning Moblan ....to a NEW mining operation near ESTABLISHED infrastructure with POTENTIAL for downstream processing........
The Placement funding will expedite the development of Sayona’s emerging northern Québec lithium hub, centred on its Moblan Lithium Project, where a 60,000m drilling campaign is currently underway. A resource upgrade is anticipated following completion of the drilling, with feasibility studies continuing on a new mining operation located near established infrastructure and with potential for downstream processing
So without delving into it too much and adding to this longish post , we are all well aware of the synergies of the potential Amos paper plant with its pre-existing Rotary Kiln , cooling towers , piping and heat exchangers , but if we're speaking specifically in regards Moblan and the nearest ' Infrastructure ' and possible downstream processing , it can only be one of three possibilities they are speaking of. 1.) would be obviously Troilus with its already established tailings and waste dumps , water treatment plant , access roads , substation , and power lines , but there is also 2.) Chibougamau with its transport HUB and location of some other ready to go potential Joint synergistic dual operations like that of DORE Copper with its Rand Mill as well as Blackrock Metals Inc and its Vanadium / Titanium / Iron project also in Chibougamau.....and finally 3.) You have Osisko Mining as well as Amex Exploration who also have extensive operations in nearby Label-Sur-Quevillon which is around the midway point via rail link from Chibougamau to Seneterre. So this could also be a prime location given the pre-existing surrounding infrastructure.
So really , these are the ONLY 3 locations which contain the necessary type of ' Established ' infrastructure which this paragraphs seems to relate to apart from the obvious possibilities of Amos which lend themselves more to NAL that perhaps Moblan ( in the context of how its worded. )
Interesting also that our very own Mining executive Mr Steve Simard had done a stint as Project Director with Dore Copper as well as his executive role with Black Rock Metals ....and a couple of roles with RIO which included head of technical services as well as Chief Engineer for 3 years between 2005 and 2008.
So his strong connection to this area of Chibougamau is very interesting to say the least and would obviously know about ALL the potential tie-up possibilities as well as the key persons in this area when speaking of ' Established Infrastructure ' .
So it will be interesting to sit back as I have been doing and continue to watch this space with intent.
Having said all that , I must again reiterate my sentiments towards participating in Hot Copper . I had obviously made a decision NOT to , and will most likely continue with those intentions. I have been called a ' Fraud ' by some as well as a manipulator by others and find that absolutely intolerable to continue on as an active contributor. The person who has recently referred to me as ' Shorting the Shite out of Sayona ' is nothing short of a massive lie , as I do NOT short stocks....I invest. There were also those who stated that they had ' on good authority ' that I was covering. What a lot of absolute nonsense. It is beyond me to understand why there are those who wish to make such unsupported and scurrilous statements about others. But it is for these reasons I am done with it.
Yes I reduced some of my holding back in March this year when I decided to ' switch ' some of my lithium market leverage to another lithium play. However net - net , I did not take anything off the table when it came to investing in Lithium and with my views for the overall lithium and longer view of Sayona remaining unchanged. In fact I would have increased my overall risk and leverage to the upside in lithium in making that decision at that time.
You will also see that I have NOT commented on that particular lithium play either and most likely will not because of my overall view towards this social media platform.
It's really a matter of the ' Few ' ruining it for the ' Many ' , but is still enough for me to call it quits ....or at least spend less of my efforts in contributing my thoughts. Social media is NOT essential to finding and making your investment choices or decisions. You do this yourself ....so why bother with the rest of this superfluous stuff. Most of the people here looking forwards are looking too far forward to make the right decision for today , and conversely those looking too much at today are not looking far enough ahead . So it's about balance and TIMING , ........and patience . Even if you were to be day trading , you have to have the patience around your buying and selling rules to execute the trade correctly.
Having said all that - Good Luck to everyone in whatever you choose to invest yourselves in. Remember , you get what you often put into it . Nothing more , and sometimes less. You have to be satisfied with the ' Less ' sometimes in order to ultimately get more out of what you do. 2 steps forward and one step back so to speak.
Anyway good luck to you all.
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