Ann: Jervois Q4 2023 Activities Report and Investor Call, page-21

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30/01/24

07:50

Post #: 72123823
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Originally posted by Deme: ↑

Many of us still believe in the thematic, however, balance sheet realities can't be ignored.

We have a MD at the helm who has zero capital & risk management skills. And one with serious character flaws.

The latest U.S. Defense Department's move to ban purchases of batteries manufactured by Chinese companies doesn't kick in until October 2027. This is seemingly to buy time - as the U.S. is slipping behind China in this area.

And it doesn't cover commercial purchases from private industry - although (separately) the IRA is potentially supportive.

The only solutions are the USG agreeing to stockpile cobalt for strategic security purposes & at a price well above current levels. Alternatively (or in conjunction), access public money. Selling down the ICO also an option - if they can find a buyer for an asset on C&M.

Jervois is fast running out of time, though, and will start breaching debt covenants by mid-year at the current cash burn rate.

We need to focus more on the balance sheet & less on the thematic right now.

I regret not selling a while ago. No point now - the majority of the capital destruction has already occurred. Might as well hold out for the Hail Mary options. As previously mentioned, there are precedents (Lynas, Syrah), but these are no guarantee of anything. Toss a coin here.

5 years & nothing but a tiny amount of monetary support from the USG. Again, Bryce is to blame for this because he spurned previous offers of USG help & no doubt played hardball with commercial parties (his whole "unencumbered" schtick).

This company is embarrassing. The MD & Board need to go.

And I will continue agitating behind the scenes until this happens.

But, yes, the electrification thematic is real. And I will continue investing in this space. It is just going to take much longer to play out than I had imagined.

And so - capital management skills are critical (they should be anyway - but our MD is a corporate cowboy outta Glencore with zero understanding of & respect towards capital).

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well said!

I had also to stretch the time horizon for all my battery metals play. In the end, we will suceeed! But it will always be a cycle

JRV Price at posting: 2.9¢ Sentiment: Hold Disclosure: Held
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Ann: Jervois Q4 2023 Activities Report and Investor Call, page-21

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