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$1.90 kidman resources limited

"On the bright side the KDR resource is high quality and both...

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JB1975

1,986 Posts.

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29/08/19

13:24

Post #: 40219377
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Originally posted by DaisyA: ↑

Hi @Quip as you probably know A40 is in administration. In my view its assets of value will be swallowed by Galaxy. The shareholders will get nothing. PLS could not sell a large part of itself and enter into a JV. It will now CR. It will survive but be handicapped for 12 months. Albermarle has slashed its investment in WA lithium by $1.5B. The outlook for lithium prices in the short to medium term is bleak. What we are now seeing is industry consolidation on a massive scale and the forecast EV revolution cannot stop it. China/US/Trade war is not helping at all. SQM is planning to increase production next year to put as many of the Aust hard rock lithium miners back in their box as they can. SQM will take a huge loss on its lithium sales to lower the price and put many of us out of business. Remember that SQM has lost about 50% of its market share to Aust lithium miners and it is fighting back. That is why it bought 50% of Mt Holland and why now it is very happy to have WES on board to share the load of developing Mt Holland just in time for the turnaround in around 2 years or more time. So while I always had the view that a higher bid for KDR was reasonably likely, that I am afraid has now changed. It would be a bold company to go into a bidding war now with WES given the black clouds over lithium. On the bright side the KDR resource is high quality and both WES and SQM will make it work and avoid the mistakes of other mines in Australia but that doesn't help you nor does it encourage a counter offer at this stage. You do however have a locked in sale price of around $1.89 and that is wonderful for you in this market. In 6 months the lithium horizon will be brighter and a counter offer would then be on the cards except it is too late. Timing is your enemy here. So while I only speculate I am now of the view that WES will definitely not increase its offer as it will not need to. A counter offer from a third party given the climate is virtually nil also. Many will not like hearing this but that is now my view for what it is worth which you asked for. I am still bullish on lithium but I now wait for 2020. I never liked odd numbers anyway. Good luck and thank you for asking for my opinion. This is not advice and I have no inside information. Remember I sold my KDR many months ago at around $1.89 and I am glad I did, although I was very conflicted at the time. There is about a 1% chance that the WES deal will not proceed so you could wait for that or sell now and lock it in at about 1c per share less plus commission. DYOR

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"On the bright side the KDR resource is high quality and both WES and SQM will make it work and avoid the mistakes of other mines in Australia but that doesn't help you nor does it encourage a counter offer at this stage."

How is that a bright side even for you? If you've acquired a knowledge of the lithium supply space how does having a competitor in that space that you can't buy shares in because it won't be listed (you'd have to buy SQM or WES which wouldn't be pure lithium plays) but that will compete with companies that you can use your knowledge and buy shares in help you?

I don't see your bright side. Very ordinary (to be kind) management is enriched (so chances are they'll turn up again when the market would probably be better of without them imo) and predatory behavior (by SQM - market share recovery you said, and WES) succeeds.

KDR Price at posting: $1.89 Sentiment: Hold Disclosure: Held
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