Ann: Half Year Accounts, page-34

As much as you aim to stay composed, it seems you tend to revert to your usual hysterical reactions when your emotions get triggered @GCar. You've brought up several emotional points here, but I’ll just focus on your last one about ATL.

I'm confident ATL asked detailed questions during their due diligence, and I’m sure JZ provided thorough, flashy answers as part of his dog and pony show. However, that doesn't automatically suggest AGY is a hidden gem or that ATL has insights we don’t. It also doesn't rule out the possibility that ATL could have just been duped, similar to what some retail investors, including yourself, have recently experienced by investing in AGY in the mid-teens.

Consider a few things about ATL:

1. They don’t have a strong track record of sound investments in the lithium sector. Their previous investment in St George Mining (SGQ), which preceded their investment in AGY, was another questionable decision that led to them losing (at least for the moment) roughly half their investment. While it’s not as bad as the 71% loss they’ve faced with AGY so far, it still reflects a pattern of subpar decisions.

2. The key objectives in the Half-Year Accounts don’t mention ATL, nor any further attempts for AGY to secure further strategic investment or CAPEX funding. Isn’t that peculiar? If ATL were still actively involved, you’d expect to see some reference to ongoing negotiations or strengthening the strategic relationship, like the one mentioned four months ago when the deal was completed. But there’s no mention of ATL in the key objectives for the remainder of the year, which could suggest that negotiations didn’t go well, or that the relationship no longer exists. Since ATL’s holdings are below the substantial holder threshold, it’s possible they’ve already exited. If there was any significant relationship, I’d expect JZ to highlight that in the report.

3. Just because large companies invest in something, it doesn’t automatically make those decisions wise. Take Galaxy Resources, for example (which we both held at the time), when they invested heavily in Alliance Mineral Assets (A40), later Alita Resources. Despite gaining access to inside information, they still lost nearly ~$60 million that they invested after Mark Calderwood placed A40 into VA, burning GXY in the process. The takeaway is that even well-regarded management teams make bad decisions and suffer for them—Galaxy did then, and ATL may have done so twice now with their investments in SGQ and AGY.

One last point: if you're going to warn others to 'beware the pirates,' it would be more convincing if you hadn’t repeatedly tacitly encouraged other investors to throw good money after bad into this woefully run company.