Ann: Quarterly Activities/Appendix 5B Cash Flow Report, page-69

First 69 Last

Share
Profile

Follow
Ants66

857 Posts.

167

26/07/23

13:18

Post #: 68990335
Share

Originally posted by Giovanni33 ↑

Just to add on top of the "oversupply" thesis that floats out around there, if we go through the hypothetical macro situation where demand really does skyrocket for lithium, cobalt and nickel and assume that does eventuate, even if there is an oversupply of juniors you have to remember at the end of the day it's speculative mining for them.

What I mean by this is that these juniors not only have to find and prove a resource, they then need to carry it through to production. While the macro case will make this easier on them, only the viable projects will get through the finance stage. This means they must stack up with not only good size and grade, but also geographical location with good supporting infrastructure, alongside good economics to send it to end users.

This might sound like I'm being bearish but it's actually the opposite. The bad projects which don't stack up financially are going to still not progress to production, which means that an oversupply of juniors is not as concerning an issue in my opinion as it's blown up to be. Quality projects that have a high chance of moving to production are going to be favored by financiers. Quality projects will get built regardless of arguing. There's even an argument to be made that in a mild recession quality projects would be looked at as safe hedges by a number of institutions.

I often see people arguing about their specific projects (such as on Nickel stocks for example) but at the end of the day that sort of discussion is pretty pointless IMO. If the project stacks up and the projected demand increase from analysts is actually true, fellow mines are not competitors but actually beneficial as juniors can share tech, experience and more in order to not fall prey to bigger entities seeking to take advantage of their smaller position.

It's not a team you need to barrack for and I would welcome seeing all good lithium projects developed as it will make investment more comfortable with the idea of pushing these projects to development.

^ Just my opinion, dyor

Expand

I'm very pleased to see you get over your phobia on posting, good job.

LRS Price at posting: 36.5¢ Sentiment: Hold Disclosure: Held
7 Upvote

0 Great analysis

Reply