A disappointing week for sure.
However, most skeletons should be out of the closet now, with the only real remaining question I have is the price achieved on contracts - which we will know in coming quarterlies.
As a relatively "old hand" in Lithium since 2017, I have been through a LOT worse than this with my Lithium stocks - including todays stars such as PLS and AKE (ex GXY).
I bought PLS at 84 cents all the way up to $1.20. Then it went to 13 cents
. Today it's closer to 5 bucks and paying 20-30 cents in divvies.
Even I didn't have the guts (or the cash actually) to go in hard at those low levels. GXY did much the same thing. I almost lost my shirt. Altura went into liquidation which I held also.
But the best thing I did do at the time (which was actually quite difficult to do) was just HOLD what I had and wait for a recovery, and try to buy just a few when I could at lower levels. Now it's look like a pretty good decision.
A week feels like an eternity in the market sometimes, when you have a large holding and a massive interest in a stock. But time will work its magic on good companies and give CXO and management a good chance to turn this ship around.
I have no idea if we will ever get to the lofty heights of $1.80 again. But I am certainly NOT a seller at 60 cents. The shorters won't get mine when they go to cover!!
I feel sellers this week will likely look back with some regret, but who knows.
The way I look at it is that the CXO plant and mine could not have performed worse if they tried, but they still made and are making a nice profit. Yes, they will need to use some or all of these early profits to do modifications on the plant and maybe even add a flotation circuit at some stage, but they have the cash to do so without raising capital.
Whilst GM hasn't been the best communicator, I think he is still the man for the job and has the skillset to turn this around as it needs someone with great operational experience - which he has. He is an engineer and this will be valuable going forward as the biggest issue with the company is it's plant recovery and mine design. Gareth should fix these issues over time - who better to do it??
Given the company should continue to make a profit, the value of the company cannot go to zero. So the shorters will have a hard time driving this into the ground and I'm not sure how they plan to cover such a huge amount of shares??.
It will be interesting to see how it all plays out. It's probably a golden opportunity for a bigger fish to snap up a bargain and launch a T/O at $1 or so and try their luck.
Good luck to all with your strategy. Mine is to hold CXO and see how things go as ALL LITHIUM MINES have issues in the ramp up phase and the ramp up phase takes a couple of years.
This is why the supply side for Lithium will be tight or in deficit for years to come as it's just not that easy to hit name plate. This is where the big investment banks like GS and others have no idea - penciling in 100% production from mines from day 1.
Have a good weekend people and Monday is the start of another week. Life goes on and you haven't made a loss until you sell
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