What a rough day, and Monday could be another test of conviction given the night on US Markets!
Agree with all posters and can understand the frustration, I’m also frustrated. Have a handful of mates invested here based on my previous research and company presentations.
Having had a rather sleepless night deciding what to do from here. So I decided to re read some of the DFS and understand what has changed, so I am a little fatigued- please correct me if I’m wrong. It looks like 2 items need addressing post this announcement.
A few people disappointed in 2024 sales - after reading the DFS, it was published April, with construction expected to be approx 18 months from DFS. So that’s back end of 2023 - nothing has changed within this announcement. By default that means first shipping at some point 2024, unless I’m missing something?
It’s looking like a reduction of throughout for the starter plant from 300,000 tpa to 100,000 tpa. This needs some addressing and clarification. Given reduction in throughput, the capex of the project has fundamentally changed. I’m assuming there’s some fixed cost in this capex, but also variable. What holders need to see is the change in this structure and how it impacts the IRR. So funding options may not have changed, it’s just the values and structure which have.
This reminds me of a lithium stock I’ve owned for many years. They released a DFS with intention of building a 10,000 tpa plant. The ass fell out of lithium when this was released, they couldn’t secure offtakes or funding. So they decided to scale it back and build a 2,000 tpa plant. They ripped the Band-Aid off, went alone raised funds - no finance so no debt. It hurt for holders at the time, but they are now on the cusp of becoming a producer by years end and share price has recovered rather handsomely.
Not trying to give a fluffy post to make others feel good, just posting some thoughts on virtual paper.
Does this announcement raise more questions than answers - most definitely and it needs some pretty decent clarification. To me the DFS has fundamentally changed, and we need to understand what the revised capex looks like, and how they intend to fund it.
Trust as they say is hard to earn, easy to lose. It’s been hard seeing some of the long term holders lose faith and depart/ reduce holdings - Pezz is definitely one of them.
I’ve decided to keep holding for now, I have a long term investment horizon on this one, and my experience has shown with my other lithium play long term holds can sometimes be the most rewarding.
The project is derisked to a point where production is more likely than not. They have brought in the right people and certainly on that path. It just looks like divs and my early retirement will be a little later than I had hoped!
Good luck everyone, next week they need to get something out to clarify all of this. No news is generally bad news, without that I feel more people will exit. Time for front foot, be candid with the market and provide a path forward.
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