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13:42
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Originally posted by apt962:
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It was more due to the market looking at the Chinese spot price and thinking it was the leading market spot price because china refines most of the LTH. However china was new to this and didnt really know what they were doing re. pricing, also the Chinese spot price is not relevant at all for a lot of established producers (that dont send their product to china for processing, or the emerging players that wont have anything to do with China also... INR falls in this basket. The players have supply contracts that use floors and ceiling prices that are based on a more established spot price/process (in INRs case i think [speculation - the offtake agreement contracts are not public] they use the Korean and Japanese Spot). It was the Chinese spot price dumping that caused the irrational price drop in INR (not the noise from environmentalists). The reason sept price predictions are low are due to timing, (not sure why September was picked, because around then breaking ground?). Its also the reason for the break in the medium term down trend as china corrects price to bring more supply back on line. We have to assume 1): the market wont learn and will continue to value lithium companies based on Chinese spot (in leu of real world revenue data), and 2): China will learn from its mistake in wild spot price swings and stabilize long term between $23K & $42K USD per Tonne (I think for long term consumer battery production ~$25k USD per Tonne is sustainable). INR is in a comfortable position that it has no impact on its future revenue from Chinese spot price. In the same sense you cant use $0.8 previous at that stage and forward predict based on that, It was based on analysists not understanding the LTH marking (thinking it was just like the iron and coal markets) and thinking $90K USD per tonne was sensible. INR based its previous DFS on ~$11k per Tonne, id expect the revised DFS after approval to use a figure a bit more higher than that for the long term (say $20-30k per tonne), the revised DFS may also outline how they plan to scale the plant up [speculation], it scales in increments of 22k Tonnes PA - (fact based on what iv been told by the board), and phase 1 permitting will have enough to feed at least a x2 in production rate at some point (brining it in line with what Thacker pass will produce but at a lower cost point). Anyway all that aside - pending approval, the next cycle peak i think will be more around June-Oct 2025 (~1year out from production) @ ~$1.3-$1.5. (speculation based on TA, NFA) but its all wild speculation until we get the revised DFS and can get a clearer picture of future projected cash flow and NPV. If those numbers dont seem high enough to be excited over, thats medium term cycle projection, long term, once its in full production, it could be higher than that... Till then im making most of the market not fully understanding how the LTH sector actually works and thinking this plant will be similar to the other aussie mines digging up 6% junk... Id expect it to stay undervalued until the revised DFS is released, so we probably still have another 3-4months at least to make the most of the price being at a massive discount (NFA...).
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thanks for your viewpoint, I tend to agree with a lot of that..
(20min delay)