A few thoughts from me:
1. If they knew that the 2 ktpa plant wasn't going to be able to economically produce, why on earth did they hire the new COO (James Shay) just two months go? Or was it James who actually got hired, took a quick look and then explained to JZ and Pablo that Rincon was a sh*t-show and needed to be put on ice? Why on earth did they need James to explain how bad things were when half of the posters here could have pointed that out for free?
2. We should give JZ credit for managing to fleece ATL out of a few million to sustain care and maintenance. I'm sure they're stoked with today's announcement. If I had to guess, they were using this investment as a chance to secure a potential offtake from a vulnerable company at a very cheap price, and JZ realised that there was no "best deal" to be had, and they weren't even going to be able to break even through an offtake with ATL.
3. AGY alone have staff and admin costs of around A$1.5m per year. Then of course there will be salary costs for the remaining staff at Puna, care and maintenance costs, ongoing fees to the international investment bank, engineering costs for Stage 3 (that is unfunded and won't happen), etc. IMO, Puna/AGY have no more than around A$12m currently on hand, and I still think they'll need to raise within the next 12-18 months to keep C&M going and avoid voluntary administration.
4. Despite some of the assumptions here, the recent sale of the 20 tonne spot shipment appears to be nothing more than clearing the shelves in preparation for care and maintenance. Lithium carbonate only has a shelf life of 1-3 years (according to Fastmarkets), and of the 80-odd tonnes Puna has produced, 20 tonnes were already over 12 months old, so IMO it was likely sold to avoid becoming worthless and thrown in the bin. This probably also explains JZ's unwillingness to disclose a price or buyer.
5. As suspected, it looks like the tenement acquisition (of worthless land) a month ago was literally nothing more than window dressing to give the SP a bit of a pump. Why on earth would you be registering more tenements, when you can't even produce economically?
6. It now seems obvious why the feasibility study (or updated PEA) was so overdue. JZ didn't want to show the market the numbers, because it would have revealed just where AGY sits on the production cost curve, and it would have killed the low-cost producer narrative and sent the SP diving.
7. It appears that the only hope now is significantly improved lithium prices, and if you take the opinion of key industry experts (BMI), this is probably 5-6 years away. That effectively leaves AGY with no positive cash-flow (other than ongoing cap raises), no projects to move forward and no way out. I think this now only ends one of two ways: AGY's share of the project gets bought out by a bottom-feeding Chinese player for cents on the dollar, or the company ends up in VA within the next few years.
8. Even if you believed there was the remotest chance of AGY securing the necessary CAPEX for Stage 3 (minimum A$380m), there's close to no chance of that happening now. The company just demonstrated that they couldn't get a plant working for the second time, yet they're expecting a white knight to hand them a CAPEX investment equivalent to 5-6 times their market cap, in the hope that third time's a charm? Please....
I'm pretty sure this turkey's cooked. For those who've lost here, my genuine condolences (other than a select few who know who they are). For those buying the dip, good luck and do some reading and look at the charts of LKE and CXO for an indication of where this is likely headed.
Over and out.
#No red flags
#AGY $$$
#Timing and dollars are everything
#Balls of steel
#Tick-tock
#Facepalm
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