Agree with your analysis Joseph, LTR is a nice comparator if your wanting one of those daydream moments on an Autumn afternoon , staring out the window, wondering why the hell cant Galan gets a move on ? This bear has retirement plans and they all hinge on Galan getting to $3 bucks lol
Meanwhile back in reality , while I am confident this could go up a lot from here, I cant see us ever getting to Ltr's level of valuation, certainly pre-production. To many uncertainties exist with Gln in making a direct comparison to LTR which today has valuation exceeding $6.0 BN Aussie, 20 fold Gln's.
First up is jurisdiction risk.......Aus vs Argentina. Later jurisdiction gets a big discount for sovereign risk. 2nd Chile's move to soft nationalise now has many questioning what will Argentina do ? Wiil it follow ? Lowry's latest podcast dropped yesterday on my podcast feed and after listening last night I note the Argentina "samurai of brine", David Guerrero, cited the exact same reasons that this author did way up thread as to why Argentina won't nationalise its industry ( primarily the resources are owned by the provinces and with 30 something projects in process of committing to investments, regional provinces wont want to upset a gravy train that will give them a source of vital foreign currency and jobs not dependent on Buenos Aires). All of that said but until the market can see clearer that Argentina will stay the course on its pro-market approach, expect continuing market hesitancy with Argentina.
Second reason is the commodity in question. We are a Brine play , not a hard rock play. Brine is more channeled to Carbonate battery chemistries like LFP which has been under heavier price pressure as its the primary route to market for low quality lepodolite being mined in China which is the industry's swing production. The price of Spod from sources like Pilbara Minerals ( and LTR is seen as a future analog of Pilbara Minerals ) that goes to integrated producers has held up fairly well, staying well above $ 4500 USD in last Qtr. In fact there is a clear disconnect now between spod prices and Carbonate prices that has opened up over last 3 months and some analysts are calling this bifurication as something that might become a more permanent feature of the market.
Spodumene goes straight to mainly integrated players in China or elsewhere in Asia like Posco. No large technical risk with the output, the refiners take on all the conversion risk to Battery grade. Contrast that to brine plays where they similarly get into the game of Battery grade chemical production like AKE or Livent. The technical risk is much higher vs spod mining and concentrating and capital intensity also much higher. This is why I think Galan's strategy makes a lot of sense as effectively they are developing a lower technical risk intermediate product just as spodumene concentrate has been for Lithium Hydroxide. Problem is but market hasn't quite worked this out but rather in fact sees this whole chloride play as more uncertainty whereas in fact its an attempt to remove risk and uncertainty in the development of this brine resource. Until the market better understands what Board and management are trying to do here and it wont until the detailed stages 2&3 of the DFS drop along with possibly some offtakes, I cant see the market re-rating this much at all, much less a re-rate akin to LTR.
So for a while yet this bear will remain chained to his PC..........but its nice to daydream