I agree mate. It's quite simple, really; how many lithium developers or producers have attracted CAPEX investments worth 2-3 times their market cap? The answer is none. But those hyping up AGY's prospects conveniently avoid discussing this fact. Overnight, LAC raised US$275 million for Thacker Pass, which is remarkably close to what AGY likely requires for Rincon Stage 3. Even though this raise represented about 25% of LAC's total market cap, they still had to apply a 25% discount. Now, consider the discount AGY would need to apply when raising a similar amount, equivalent to 240% of their current market cap... It's a concerning prospect.
Many might argue that AGY will secure a pre-paid offtake, thus dilution shouldn't be worrisome. But if that were so, why hasn't JZ managed to cut a deal? And more importantly, why would LAC take the route they have? Did they not consider securing a prepaid offtake, or is it more likely that it's not actually a viable option given the current state of the lithium market?
AGY Price at posting:
12.5¢ Sentiment: None Disclosure: Not Held
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