ASX Today, page-30420

It's the weekend and not much is happening,so thought I'd share some thoughts that I have been having in recent weeks.

My intuition and logic tells me that LTR is likely to receive a new takeover bid quite soon. Arguably markets are reflecting that by continuing to support the price at a premium to the ALB conditional proposal at $2.50. That said, the speculation which saw our price above $3.00 a few weeks ago has subsided now possibly as shareholders' expectations have been dampened by the shorters/manipulators to soften us up...same modus operandi as we have seen before here and with past takeovers. But time looks to be running out for further action before markets pick up later this year.

At the risk of boring everyone, we are by far and away the most attractive target for any entity across the lithium space, with near term production, 100% ownership of a tier 1 resource in a tier 1 jurisdiction, best quality off-takes, and remaining significant uncommitted production. There are many other attributes we all know about. Then there's our share price which looks a bargain based on modelling such as @Antiviariel 's forward looking spreadsheet. One can easily justify a potential doubling of the current price over the next 12months and significantly more looking forward a few years. Tony O said "ballparks away"! Why wouldn't an entity take this last opportunity to lob a bid? I'm thinking a bid price is likely to be around $4.00 per share. This figure is a premium of around 42% to the last month's approximate VWAP of $2.80. When the ALB prospective offer($2.50) was disclosed it would have represented around a 56% premium to the then approximate monthly VWAP of $1.60.

While a $4.00 bid would still be unlikely to be totally successful, imo it is very likely it would shake out a good number of shares(not from me). An on market raid leading up to a formal bid could well achieve close to 20% pending the formal bid. If I was a suitor, I would be very happy to secure say 25%-30% of shares and a board seat at that price(ALB already has 4.4% apparently). That would provide a very good springboard to a subsequent bid down the road after production is ramped up and before downstream processing is developed. Cost to get to say 30%, would therefore reach AUD2.7bn or USD1.78bn. This approach would set a suitor up to take ultimate control in the future if successful to this extent(30%) as well as help to lock out any alternate bidder from gaining control. Seems very affordable to the likes of ALB or RIO.

This scenario may be a bad outcome for us as shareholders because any potential takeover premium built into our share price could be largely eliminated. But it equally would allow some shareholders to take some profits and put a better floor under our share price in the short term. I am not advocating any bidding, but simply speculating what is possibly being work-shopped in executive committees and board rooms at say ALB & RIO.

I think LTR management has been very wise to largely keep quiet about any potential value uplift that might be implied from say the release of an updated DFS, the prospect of a Buldania Mineral Resource Estimate upgrade, and potential windfall from pre-commitment of its currently uncommitted concentrate production. These value drivers and the DSO sales, could be wheeled out to build the value proposition in any defence. The tactic so far is to have a consistent flow of site videos of progress and encouraging rhetoric in successive presentations from TG, TO, Adam Smits and the Commercial Manager to hang in for production which is not far off. I think our management fully expect another offer for the company.

LTR will definitely get a major rerating as we get close to production and my gut feel is our share price will get to $4.00 on its own around the end of the year. More gains will come if we can achieve our timetable, and the price of lithium chemical product maintains it's expected trajectory. So I am strapped in, hoping we can keep our independence and not receive any further bids, but equally, I can see that it's likely someone will have a go...and soon. That alone makes us a "strong buy" as indicated by numerous brokers, and I am seriously contemplating a major increase in my holding by selling several other stocks after 30th June (tax reasons). I am unable to see any other investment out there with the risk/reward ratio to match LTR. This is not financial advice but simply my own opinion and investment strategy.

Regards

DF