Yeah I dont necessarily disagree, in-fact I think you will be correct, but its not as clear cut to me.
If the demand and price come up quickly in the short term, PLS have a lot more leverage than LTR right now. Fast forward 12 months and PLS will still have significantly more leverage to price upside, PLS will be at 1mtpa, double LTR capability. PLS 20% short interest only makes things more interesting with how that will play out. Add the cash they have in the bank they will be able to fund all growth plans and then pay sustainable dividends going forward. LTR will not be paying dividends for several years.
Go the other way though, prices stay low for longer and dont recover, PLS has the cash to weather the low prices and still undertake strategic growth projects, while LTR (which I am sure will also be OK and not require CR as has been suggested), will not be afforded such a luxury. In fact if LTR is able to breakeven in a ramp up year, that would be an incredible feat. In all my years in the mining industry I dont think I have ever seen this outside of Iron Ore.
Dont get me wrong, I am invested in LTR as I am PLS. I want to see lithium, and both companies do well, and in the medium term I think they both will. However I am also not going to view much of whats on this forum through rose tinted glasses like so many do here. Believing that there will not be any issues with the ramp up of plant and UG mining, that recoveries are going to be 80% at the turn of the key, and costs so low that the current lithium price will result in profit. I am not that naive. While today is a great milestone and management have been superb, LTR still have much to prove.
IMO
LTR Price at posting:
80.5¢ Sentiment: Buy Disclosure: Held
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