Good for you buddy. I stopped posting for awhile because I...

Good for you buddy. I stopped posting for awhile because I didn't want to share my opinion when I realised things were not as they seemed.

However on balance, I think it is appropriate to provide the other side of the equation so people can make a rational decision whether to invest or not in GXY. Blindly jumping off a cliff and blindly holding faith are both equally fallible.


So here are my unfiltered thoughts. Here's why you should be concerned:

* Management are not being 100% honest on a consistent basis - there are inexplicable comments (documented in public) made by management that are then found to be incorrect (this shipping thing is a classic example), shorters on wrong side of trade, a number of positive announcments expected by XXX (remember that one?!). I suspect the 100,000tpa LCE is another throwaway - no way they will hit that in 4-5 years due to reasons below. Predictions about pricing that have the line pointing the wrong way in hindisght (looks like BOD is not that well connected after all)...any absence of discussion about spod supply (read between the lines)...cue someone throwing out this 1 mtpa demand....I think it's awhile away and yet to be seen.

* The straw that broke my back - AT noting he was going to buy/had bought on-market at the AGM...sure, with money prised from the poor long term retail mum and dad's who have seen huge wealth destruction due to the poor management communication. He didn't buy anything. He was awarded free money despite the current headwinds and poor stock performance in the last 18 months even compared to peers (ORE is not making new lows on a daily basis...PLS wasnt until recently either)...yes I voted NO.

* Mt.Cattlin has a short mine life - I actually thought life was longer and extendable until Martin Rowley made reality very clear in some of his comments at the AGM around A40. So give Mt.Cattlin 5 years, and bear in mind that cost of production is going to go up as the resource heads towards depletion. Then there are remediation costs.

* Where is the strategy? A40 - great buy at a cheap price...but the subsequent messaging about why it was bought now seems like it was for lack of being able to show any action rather than a clear articulated strategy...why did you buy it? doh...just because....GXY may need to articulate this because A40 is going to be a continued cash drain (BTW, they are not shipping anything at all at the moment). LPD? Remember that left field ANN about processing Mt.Cattlin tailings?...then nothing...my guess is it was a dead end...LPD has potential but is currently priced on hope, and another cash drain that will need all the funds we have...whats the end goal?

* Sal de Vida new direct extraction technology - the language was very subdued about the results thus far in the AGM presentation. Read between the lines (unless indicated otherwise) - progress is slow and not working as well as intended. And who are these partners? Why must they be secret? You could argue the case except that there are plenty others out there trialling such technology in the open so its not rocket science or secret squirrel. Analysts at the last quarterly were asking some great questions too about the new tech - these kinds of chemical processes take time to balance out...then scale up...short answer - I'm not holding my breath, Sal, even with direct extraction is a long way off....oh, and BTW, whats going on with the lining the puny 10 Ha. ponds? There was also some sort of front end engineering/feasibility meant to be completed at Sal de Vida in 1Q? Where did that go? And is that Feasibility study no. 3?! Management have been condescending and miserly with the truth which holders deserve to know.

* James Bay is nowhere near being developed and will likely take substantial cash to complete (Where is this money coming from?). Oh and that downstream operation they were going to piggyback off Jiangsu know-how - I find it hard to accept that the know-how has not been lost in the last decade, made redundant, or had to be sold off to Tianqi as part of the deal...maybe it's all in AT's head!!

* I've seen (rightly or wrongly) Joe Lowry as someone who may not be as independent of an independent expert considering all the jumping around in positions, but I suspect he is closer to the pulse on what happened at SdV. From his comments, pretty apparent that AT had a buyer lined up, MR or the board collectively wanted more...and in essence they overcooked it. They will not get pricing like they did for POSCO because the market and sentiment has changed...the fact that management is still bandying their great deal with POSCO and using it as a yardstick suggests they are out of touch or just not going to get a deal due to their inability to respond to the moving market...that makes SdV ironically a stranded asset worth nothing.

* If your answers to any of the above were that Mt.Cattlin will fund it all...sorry...yes, if they had moved deliberately 18 months ago, very possible. But instead they got too bogged down trying to make a deal (ignoring the rest of the business)...then failed to make that deal (this is a big no no - you have to make the deal if you've put your eggs in it)...now they are stuck really. Mt.Cattlin is going to struggle from hereon - reality is that spod pricing is going to be compressed because while GXY were turning down good deals in their desire to retain control (albeit in hindsight), everyone else was moving on and developing huge spod resources - it doesnt take deep expertise to make a spod operation - that's why every man and his dog has one now.

Spod pricing is going to stay under pressure until the least capable fall out. Mt. Cattlin may be at the better end except that it has such short life and there isnothing replacing it yet. Maybe A40 is that answer but they have their own problems and will need a fair bit of funding to get there.

IMO It'll take a few years to sort the corn from the chaff to see which spod operation was swimming naked (PLS is coming out and down, AJM is a dead dog but for another bailout, MIN will do well but ALB may burn them by stalling Wodgina or the cash, A40 needs to deal with Cowan and get some drilling on, WES evidently paid too much for something way too far away (KDR)) but that's not time that Mt.Cattlin has. And on the brine side, there are now literally hundreds of great brine and spod assets at cheap prices which make SdV development uneconomical. And quite frankly, I don't think management has the expertise to do it without a partner that was meant to have been sealed a year ago, got extended repeatedly and now looks like its not happening at all.

* There is also very clearly friction and an internal struggle in the board, looks like AT drew the short straw. People are looking at this new CEO as some sort of messiah...well proof will be in the pudding but a part of me questions whether the BOD has just simply acquired a 'yes man' because AT took things in the wrong direction and has now fallen on his sword. ANN indicating AT moving on is not far away, when ironically, I sense the problem may be deeper. And how there is a father and son in key roles at an ASX 200 (for now) company joke reeks of nepotism (not saying it's happening but it's not a good look considering the evident lack of capability in fulfilling investor relations functions!).

* The fact that even at the AGM, BOD wanted credit for Sal POSCO sale...great! Great job there...18 months ago!...but if they hadn't done that, the stock would have been absolutely crucified now...not exactly a great brag either in light of the poor deal making that has ensued since. Forward looking remember?


Oh and if anyone wants to throw another buffett saying out for why the disciples should sit around holding the faith, rocking back and forth chanting "GXY GXY GXY"...one of Buffett's key criteria was good management.

Enough said.