If the rout we are in at the moment were to continue for much longer, I could see SYA selling 2/3rds of it’s equity in SYQ to a chemical company (like LGES or POSCO).
The makeup of the jv in that case would be as follows:
LGES or POSCO - 50%
SYA. - 25%
PLL. - 25%
Caveats of the sale, would be to increase output from the mine and concentrator as soon as is practical and by as much as is needed.
Secondly, build a downstream chemical facility at NAL.
While SYA’s equity would decrease, the overall return to them might be much the same, taking into account downstream revenue.
Having this burden removed would allow SYA to develop their Northern Hub.
Having a Tier 1 partner at NAL would remove much of the stress that the jv is currently under.
The thing about such a strategic alliance, would be that the wheels at NAL would keep turning.
At the moment, that is what matters most.
SYA Price at posting:
5.4¢ Sentiment: Hold Disclosure: Held
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