Ann: Orocobre and Galaxy Merger - Announcement, page-328

We know that other parties have had access to the information that Orocobre received. The company previously received multiple bids for a strategic partnership. - They received several offers, some of which I am sure would be reviewing this one and considering their options. Galaxy has time on its side in a rising lithium market, whilst being able to proceed at Sal De Vida without a partner. (If what they said before was still true)

It is also worth recognising that some parties more recently were disadvantaged in their ability to make an offer due to their inability to visit Sal De Vida due to COVID.

I wonder how this deal might stand to a legal challenge when it comes to securing the best outcome for shareholders. Particularly when Galaxy couldn't be bothered putting much effort into how they presented James Bay to the market...

The company acknowledged that they had the funds to proceed with Stage 1 without a partnership, then did a complete 180' claiming that they didn't have the expertise to do it, no doubt to go along with the requirements in the merger, that being to sell it which according to the break clauses, Galaxy are required to do. It's really hard to know what the truth really is now, as Galaxy management cannot say otherwise, hence the answer received to the question: What is the difference between Galaxy proceeding as a single stage at Sal De Vida v's Orocobre being involved?
What benefit is Orocobre bringing to that project that isn't currently available? (at 40 minutes)

Toyota are entitled to maintain their 15% ownership in Orocobre, so when this merger completes and their ownership drops to 7% or so, they are entitled to bring that ownership back up to 15%, of which will result in dilution for all holders, but given the low ball value assigned to Galaxy shares, the holders get their face slapped on the way in, then screwed once they are in the door.

I guess the question is, what value Galaxy may have increased by vs Orocobre had they stuck with the initial plan presented to the market, and what Simon had also said to reporters. That being, that they would build Stage 1 at 10,700tpa and then review where they go from there.

Given the lithium market is only just taking off, and remembering what I told you about the 11th hour Talison deal, exactly what I believed might take place is occurring right now to Galaxy. The Talison investors and management knew what they had and didn't just roll over, causing Albemale and Tianqi to battle it out.

The question isn't what the merger brings in the long run, the question is that of, are Galaxy shareholders receiving maximum value in this scheme of arrangement.

Your tune has changed... you didn't want a merger before. You saw value in the long term plan of Galaxy hanging on and doing it alone. If you look at all the LCE that Galaxy brings to the table with its projects, both on current production and future capacity, Orocobre brings very little. I don't understand why any share holder would want to merge into a company that has a history of poor execution and crap pricing.

Naraha isn't creating production, it is rectifying the failings of Olaroz Stage 1. If you add the Orocobre claimed cost of production to that of Olaroz, per tonne of Lithium Hydroxide it is costing US$5,367 per tonne produced. The cost of production from Naraha many don't believe Orocobre's claim of $1500 per tonne and even once it is built Orocobre profitability is worse than Galaxy, as their LCE value still remains around 8000tpa.

Even with the short lifespan of Mt Cattlin remaining, all that Galaxy needed to do was execute exactly as the new plan indicates. All of stage 1, 2 & 3 at once, or increased Stage 1 to 20,000 which was the plan for stage 2.

The call can be accessed via the following link:

https://services.choruscall.com.au/webcast/ubs-210419.html