Alot of people have misunderstood SDV. The products, be it carbonate or hydroxide will not be selling at market but to a battery maker. Unlike spodumene, its sold to a converter, who then sell to a battery maker and keep the profit difference. By building SDV, Galaxy becomes the converter and miner, with the lowest cost of production. The products will be battery grade. The company is also in the process of negotiating the structure of the deal with potential JV partners. It no longer need JPMorgan. The process of selecting has ended. The test work is being done on behalf of those in discussions. They want 50kt instead of 25kt. . The potential JV partners have been selected. The structure and cost is the on going discussion.
Hard rocks are mineral producers, not chemical producers. The metal content in spodumene is more critical than the percentage of lithium. The metal content change the quality of the end product.
My prediction for production, is equal or higher revenue this year than last year's. The average cost have dropped around 10% in Q1 and improving going foward. On top of this, the projected production is 25% higher than last year, more than enough to make up any fall in contract price. The contract price is around 800 by my calculations. NMT is 780.
Many retailers have stepped off, but many have also stepped in. There was some short covering but against institutions buying.
Many will have sold and crystallized a loss, others who bought in will be winners.
EVs will be parity to ICEs in 2022. This will get shorter by end of year.
There is no day to day spot price, contrary to many beliefs and supply will be short by next year. All current available battery grade supply is spoken for, to go in 2020/21 EV models. Its 6-12 months from mine to battery, plus the EV production.
The psychology of human being is to be on the winning side (survival), when faced with the opposite they panic. The difference between humans and animals is to think beyond the current situation using logic. The company is backed by 50% cash instead of debt. The person that owns a house plus 50% cash is in a better position than one with a morgage.
GXY Price at posting:
$1.64 Sentiment: Buy Disclosure: Held
