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15/08/24

12:32

Post #: 75219736
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Originally posted by anatol: ↑

PLS's acquisition of LRS is not a good move in first look IMO. PLS already has a huge deposit at Pilgangoora and PLS is producing from there although it's not very low cost. PLS says that LRS's project is a low cost one. I didn't make a deep research about LRS, so I don't the details, no DFS yet. All I know it has 77mt at 1.24% grade which is not bad. I also would prefer LRS project against any project in James Bay Canada as James Bay projects are high cost projects.

It's also not a big dilution to PLS SOI however I think it'd be better for PLS to preserve its cash until the market recovers.

However I am telling these with my limited knowledge about PLS's secret strategic plans and its deep info about the lithium supply and demand situation in China. PLS is making many deals with Chinese, they know very well about Chinese lithium market I assume. So they might be high hopes about the market recovery which I also demonstrated with cost curve graphics showing the right side of the cost curve is nearly dead.

In regards to PLS and LTR merging under script offer or whatever it is, I don't think it's viable. In these type of stressed times those small miners (relative to majors) can't make that type of deals. While small miners like PLS and LTR acquiring the small projects, the majors will watch. After the M&A activities finished at lower levels then the majors will launch their acquisition actions. For example RIO, BHP etc might acquire PLS or LTR if they have appetite for lithium sector. That is possible IMO.

That happened in coal seam gas industry 15 years ago.
Queensland Gas acquired --> Sunshine Gas
BG (British Gas) Group acquired --> Queensland Gas
BG Group acquired --> Pure Energy

Arrow attempted to acquire --> Pure Energy (Bidding war with BG Group)
Shell acquired --> Arrow Energy
Shell acquired --> BG Group.

But Queensland Gas or Arrow Energy didn't try to acquire each other or didn't try to merge as they were in similar size companies and were looking to be acquired.

What I'm saying is both PLS and LTR may not have long life in ASX and they will probably be taken over by the majors. Probably the reason for heavy shorting of both of those companies is that and BEOT knows about it and keep shorting and accumulating.

Probably the management of those two companies also know that well. They might be even in talks with with those majors atm. Time will tell.

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Great post Anatol.

I think it is also possible. Nobody knows what GR's intentions are at this point- in the event she is happy to sell her stake in LTR she would be looking for a profit and like us all CGT would apply. Soon it will be 12 months since her buying spree.

IMO

GLTA

LTR Price at posting: 80.0¢ Sentiment: Hold Disclosure: Held
13 Upvote

0 Great analysis

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