"PLS have now followed exactly the same script that is why i am questioning it and I am surprised by the approach.. My expectation is that they have to deliver a sale that shows a see through value of +1.5B AUS otherwise how could they even bring it to shareholders? If not, they will be forced to announce 'no sale' then what
So I am expecting one scenario but I'm prepared for both "
Well again it gets back to expectations , management can't run a Company based around fulfilling individual expectations and HC being a traders forum, most expectations are taken to the extreme .
The Company has said it's looking to sell 20-49% of the mining operations but will only do so if it is value accretive for PLS, or words to that effect, a simple statement of fact, no figures mentioned and no guarantee of execution, long term investors understand that and management are only interested in long term investors, it's a very long term project.
In the meantime there is also the POSCO conversion plant deal which IMO is equally important as it marks the start of a transition to being able to clip the ticket twice ,as a Spodemene / tantalite producer and a Lithium converter using your own supplies...
As a general rule almost everything involved with projects take longer than expected and outcomes a little different than expected, personally I take the approach of setting conservative expectations and being pleasantly supprised by any upside....
Everything PLS does advancing it's future costs money and unfortunately solutions to financing kexpansion are being done at a low in Sodemene prices , but as Management explained it's best to do now to fit in with the time line requirements of those who are going to convert our products and provide the cash, basically you can't have it both ways but I suspect we will do just fine..
However if a partnership deal doesn't transpire this time around, we still have a 100% WI of stage 2 funded and proceeding, with the high likely hood of a deal with POSCO taking us into the conversion space at the same time.
The beauty of being a large, low cost, high quality Sodumene producer in a growing sector with 100% WI is. A: Customers need your product , big players need a large long life supply and will provide a minimum price backstop, and have done so.
B: With a backstop and a time of lower margins the Company can still make good money on volume alone , and makes a killing with higher margins. With our current production costs probably somewhere in the region of US$ 350-400 t and heading down to nearer US$300 t , while recieving US$675 t plus tantalite there is a still a good margin for even lower prices should that happen.
C : 100% WI interest gives you options and that is what the Company is currently looking at using.
Cheers Whisky
PLS Price at posting:
60.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
