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clock Created with Sketch. 24/01/19
10:33
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Originally posted by Wary 1:
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It's not quite the Quarterly that I was expecting, but it is also not bad either. There is a lot of detail which explains the reasons for the increase in mining volume and lower recovery and cash margins. This will be addressed once mining progresses across to the east side of Floater Road and as a result of the Yield Optimisation Project. I am disappointed though that there is no real news about SdV other than that several offers are still under consideration and negotiations are ongoing. And I wish there was some more news about James Bay, but it is what it is. What I did find interesting is the Industry and Market Update commentary which points to a more buoyant market in 2019 and a stabilisation in Chinese domestic prices for lithium. The information about NEV growth in China and favourable policy positions in other countries highlights the ever increasing Li demand that the supply side will be struggling to meet. I was also interested about the statement that the current state of the Li market presents a firm foundation for price recovery and potential industry consolidation, and wonder if GXY might be one of the companies that could potentially be consolidated either though it taking over some smaller fish or being taken over itself by one of the bigger fish.
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You can see it as a glass half full or a glass half empty announcement. Things have taken longer than expected and there have been unexpected problems. But no big problem. Ever tried to build a standard suburban house. Unaccountable delays beforehand with local government. Suppliers and tradies let you down and then the client is unhappy with the delays and the end product and holds back money. I suspect a mine is slightly more complicated and expectations are not going to always be met. There are more positives than negatives from this report. It was common knowledge beforehand that the price had taken a battering but Mt Cattlin is still profitable and there are firm plans to move SDV and James Bay to production. In time Mt Cattlin will be a minor asset for GXY with the other 2 dominating. There is no JV with SDV yet because the offers have been too low. GXY can and will go it alone if they can't get what they consider a fair offer. Nothing wrong with that strategy
