Gekko,
The pressure will only get greater over the short term. It looks like we will see a sub $2 price shortly, and this will be the trigger for either a predator to emerge or it could be the sign of more serious implications to the GXY business.
If you look at the "short" narrative, it features the following logic:
* Mt Cattlin will become Australia's marginal producer so will be vulnerable to excess supply talk
* SDV has now been delayed by 12 months (and won't be in production until 2022) so will be a cash drag on GXY
* A JV partner cannot be found, so GXY will have to go it alone, further impacting GXY's cash position
* With GXY exploring alternative technologies to brine extraction, SDV has raised additional risk to delivery of new supply, so will be priced (down) accordingly
All-in-all, this is a significant low in the development of GXY as a Li mainstay. It seems that a takeover or break up is the best outcome some of us could hope for.
This has been a slow boil and now we are looking a little cooked.
AT had better have something up his sleeve or I think we'll be looking to move about 2000km further north to find an alternative Li investment.
GXY Price at posting:
$2.07 Sentiment: None Disclosure: Held
