Glad to see the vibe on this thread has greatly improved. I have taken a break from web forums due to the unceasing and unnecessary negativity that was being unleashed on anyone with a positive outlook for LPI. If as an investor you are in for the long haul, then macro-global events that are out of your control are just that, and as history has shown, markets do recover over time, as they will this time. As Buffet has said, when there is blood on the floor......
And yes the news flow from LPI during 1H 2022 has been slow, but I can assure you, there is a method to LPI management/ Board's madness. And it makes perfect sense.
Furnaces, a takeover is definitely a possibility but many of us patient long-termers would prefer the go-long option as there is ENORMOUS value to be derived from the Maricunga project over the next three plus years.
Firstly the 100% consolidation is a boon for LPI's long-term value and will enhance prospects for funding - the question is, if Mitsui comes on board, and that is a strong possibility, will it take an equity position in the project like it has done with the majority of resources projects it is involved in around the world? If so, along with full, long-term production off-take arrangements, it could go a LONG WAY to funding LPI's portion of the Maricunga project. A LONGGGGGGGGGGGGGGGGGGGGGGGGGG WAY. LPI financial risk would be substantially reduced.
A final point on the consolidation. I know some investors are disappointed that the consolidation will occur before the demerger, but as Bush pointed out, this is a sweetener for MSB and BRZ to agree to the terms of the merger, which are in LPI's favour. We picked up an extra six-odd percent of the Maricunga project and I feel that free six percent will be worth a motza down the road. We know what we have at Maricunga, whereas we don't know what we have at Greenbushes et al in WA.
Also remember, this is only stage 1 at Maricunga. Cristobal will be talking about expansion plans for Maricunga at the Fastmarkets Conference in Phoenix in a couple of days. Successful design and implementation of DLE for stage 2 would cement LPI's authority on the Maricunga and add to it impeccable ESG credentials. Preliminary estimates put the Stage 2 NPV around the same as that for stage 1. However, I believe there are economies of scale that could be derived from stage 1 and the lithium resource is higher grade within the Litio tenements, resulting in a higher stage 2 NPV. A preliminary estimate total stage 1 and 2 project NPV of US$2.8 billion would translate to a very high LPI price.
After the Maricunga merger is complete, the LPI share register of 605 million shares is still a fraction of most of our peers. A FRACTION. And many of those don't own 100% of there flagship project. We are in an enviable position for a company that is shovel-ready. Remember that nearly AUD$100 million has been expended on Maricunga pre-development activities over many years.
Let's face it, LPI is unquestionably in the box seat at Maricunga. We are the first mover in terms of project development and own the best track of off-salar land for project development purposes. We should control, in partnership with the Chilean Government, future development at Maricunga. The current Chilean Government's position on lithium investment and taxation is very, very encouraging.
The next six months will be the making of LPI, with the next three months to be very exciting.
GLTAHs and stay positive. There is a LOT to look forward to.
Expand
