Glitterati and
Tradeprestige - thanks for your posts, which are really valuable and much appreciated. I've got a really decent chunk too as this, IMO, is one of those 'mortgage-buster' stocks (though luckily I haven't got one any more).
In my judgment, you don't see many opportunities in junior resource stocks as good as this looks right now -v- its MC. Here's some of my thinking (all of which you guys know, of course but this setup looks so good I want to join in your enthusiasm). From the top down:
- The world needs increasing amounts of resources. Ironically, the EV movement adds to this but that's another story. Good for us though.
- Lithium's unusual properties ensure that it will have industrial application into the foreseeable future. This goes way wider than energy storage. It cannot be entirely or even significantly displaced in the near or even medium term. Huge factories have been set up reliance of supply for many, many years.
- Highlighted by geo-politics and disappointing local political stupidity (WA recently) in shutting down current energy sources before renewables can adequately replace them, energy storage needs will be large in people's minds for a very long time. Wait until the fridges go off over summer... Lithium will never be completely be displaced from the energy storage world even if some usage trends change over the years.
- Consequently, we're investing in a great sector. I love good macro tailwinds. Look how the stock bounces when the market settles a bit.
- The big buyers (China etc.) are comfortable enough buying from Argentina, especially as the Europeans are rightly hoovering up future supplies from companies like Vulcan in Germany (and perhaps France and Italy).
- Thanks to our savvy and dynamic management team - special thanks to Mena Habib we are getting after our assets seriously - not just the lithium, of course. The others projects have significant potential as well, as further assurance. I must add that Mena is very well supported by Chairman Stephen Ross and former Chairman David Turvey and our Exploration Manager and others. I like companies with drive.
- We're not starting from scratch; we've got an existing resource - tick. More would be better though, and tonnes added on top of that have additional value because scale can attract more buyers as well as lower opex etc.
- Our neighbours at AGY are well ahead of us time wise but we might in time be able to prove a resource similar to what they currently have. With their MC around $900M as I write this, if our part of the salar performs like theirs, and we can get our resource into that range, say, you have to wonder what our MC will then move to. Free markets and economics tell is that ours cannot stay anywhere around current levels of about one twentieth of that. (So, I've just added a few more, right now - seriously).
- So we're drilling to prove up more - and that obviously is going very well - as per the announcement that started this thread. It seems to me that if we get reasonable flow rates then we should get a very significant upgrade to our resource. Clearly, that's what the company is chasing.
- And if we do get a significant upgrade in the resource, I expect us to get a significant upgrade in our MC.
Incidentally, I think that it was perfectly correct to describe our results as 'highly encouraging' because they were:
(a) it is very positive phrase (I disregard occasional possible misuse of it by some other companies in different circumstances);
(b) the rest of the announcement was littered with positive indicators that were indeed very encouraging at this early stage. The interval was large, the sections look like they should flow well (not my expertise and will need lab testing but I know enough to say it
was 'highly encouraging'). More importantly, our geos including the locals will know what is desirable in that location so must like what they see.
(c) I also know that, as has been mentioned, the ASX exercises a lot of control with what can be said when commenting on exploration and appraisal outcomes. No surprises there. Moving on then ...
PNN has had great potential for some while but it has taken our new team this time to get it really cranked up. Looks very good now and as though a rerate has begun, as you say... Let's see what the lab comes back with.it's not just that we look well placed to add meaningful resources but we've got a
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