The only thing going on here is the market doesn't like uncertainty. Very soon we'll either have a sale transaction with a known A$125M minimum (now with possible upside), or confirmation that NMT is to remain an owner of a producing lithium mine. The world's second largest lithium mine. With a new pricing agreement about to kick in that's linked to lithium carbonate pricing (much better than spod benchmarking) and a life of mine take or pay customer that is highly reputable. With work underway to increase annual production by 20% and upgrade all output to 6% grade (both this year). This is a cash generating machine.
NMT already has more than enough cash at bank to fund all of its planned activities, so there is really no downside whichever way this goes. Someone either pays a full and fair price for our Mt Marion stake now, or we collect handsome annuity profits for years to come.
One would result in a large one-off capital return to shareholders, the other in ongoing annual dividends.
At the current share price, NMT is trading below cash backing if a sale happens, or provides a 7.4% dividend return assuming 2c annual annuity dividend (which would be consistent with previously stated policy).
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” (Buffet)
NMT Price at posting:
27.5¢ Sentiment: Buy Disclosure: Held
