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AGM, page-164

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16/04/17

13:41

Post #: 24090243
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Originally posted by airconditioner ↑

And even accepting your own calculations lock, stock and barrel
the shortfall is considerably less than 50% of the profit from the first 25kt offtake from SDV at $15k USD/t.

A deal to presell this first 25kt with a 50% prepayment (same as was done with Mt Cattlin) would more than cover it comfortably, even cutting them a nice discount deal or permanent guaranteed 100% offtake supply status to push it over the line.

A brine plant like SDV has the kind of production that would set up a medium sized auto company with enough supply to confidently expect that they'd have enough supply for their new range of EVs.

Close enough is indeed good enough when in comes to brine capex, as it can be incrementally expanded up from 20ktpa etc. Basically the way I understand it, is that it would be in constant expansion over a period of many years and that 50ktpa is the ultimate goal.
Do the maths on the profitability of that one...
This is a 40 year LOM operation with some of the best chemistry brine in the world.
It will be in production for a generation of Galaxy holders.
That's why they've always taken their time to get it right.

BNP bank are along for the ride with debt facility and have now become substantial holders.
Or switch SDV to hydroxide production for even higher returns.
Both carbonate and hydroxide production are possible with a change of reagents.
Depends on which product they want to produce.

You're also missing the $60m already raised and being put to use now on the new assets
and the onset of production from the test plant.

This last AGM notice also states clearly that it may indeed be James Bay that is actually the one that gets green-lit first, with far less capex to cover - possible even by just using the next 2 years cashflow, and the plant could already be in production by late 2018/early 2019.

See?
Plenty of pieces on the board and many ways for management to skin the cat.
Development doesn't necessarily involve CR when you've got already got a mine in production, some clients and clout as a producer.
Capex is never due all in one go.

And suddenly this massive project is still within the realms of being achieved by Galaxy alone, without needing to raise a massive amount of cash via CR, or sell equity in the project - which could also be done, particularly if they were to fund the entire capex of it going straight to a 50ktpa plant at SDV. But then we'd be complaining about losing equity...

Clearly, management won't be able to make everybody happy.
But they may just make them all rich if they have a bit of patience to see it come together.

Anyway.
I got a long drive tomorrow so hope you guys have a good time with your families tomorrow (or fishing or writing stuff on this stupid forum or whatever) and a chance to think it through a bit more.

Expand

AC - thank you for your posts yesterday.

I pretty well agree with your overall assumptions and I guess time will tell how much varies in terms of the actual development timing to get SDV and JB up and running (even early low target production) as well as what price we negotiate for our end product coupled with the actual costs of production for both projects in addition to ensuring MC continues to operate to capacity and grade.

I still tend to think the hurdles set for the Directors' to take up their intended share options are relatively low, however when achieved, I would see a share price well in excess of A$3.15 on a post consolidation basis and I guess that is what matters to us a share holders.

Safe driving and watch out for those demerit points !!

GLTA

GXY Price at posting: 42.5¢ Sentiment: Buy Disclosure: Held
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