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Ann: Corporate update, page-214

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w27

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11/07/22

10:58

Post #: 62472098
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Originally posted by WhatsTheTip: ↑

Assuming ESS goes the way of CXO and LTR with multiple off-take agreements, the first one is key. IMO it has to be an established major entity with currently built Hydroxide capacity, is currently making and producing batteries or is a substantial OEM that is looking to secure lithium supplies for an upcoming conversion to EV's. There are a lot of companies that meet this definition but Livista Energy isn't one.

ESS's first off-take is a precursor to looking to raise probably over A$100m (if the plant involves floatation). To do that requires the market to have complete confidence that the purchaser will deliver on its side of the off-take deal. Quite frankly I can't see how you can achieve that if the off-take was signed with a start-up. You can sign off-takes with start-up's when in production, a 3rd off-take could be with a start-up (but probably not the 2nd).

I think Livista will also need the timeline to production certainty that would come from an offtake from one of the existing in-production operations that is looking to expand and will therefore have additional supply.

Expand

The important thing with an off-take partner is financial capacity to honour any deal, not whether it is an operating producer. There will not be a surplus of spodumene any time soon. If the off--take partner is not in production, the surplus spod can just go on the PLS web site for auction.

Originally posted by WhatsTheTip: ↑

Assuming ESS goes the way of CXO and LTR with multiple off-take agreements, the first one is key. IMO it has to be an established major entity with currently built Hydroxide capacity, is currently making and producing batteries or is a substantial OEM that is looking to secure lithium supplies for an upcoming conversion to EV's. There are a lot of companies that meet this definition but Livista Energy isn't one.

ESS's first off-take is a precursor to looking to raise probably over A$100m (if the plant involves floatation). To do that requires the market to have complete confidence that the purchaser will deliver on its side of the off-take deal. Quite frankly I can't see how you can achieve that if the off-take was signed with a start-up. You can sign off-takes with start-up's when in production, a 3rd off-take could be with a start-up (but probably not the 2nd).

I think Livista will also need the timeline to production certainty that would come from an offtake from one of the existing in-production operations that is looking to expand and will therefore have additional supply.

Expand

ESS Price at posting: 37.5¢ Sentiment: Buy Disclosure: Held
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