Was not aware of this valuation and find it strange that two non producing assets would be valued more than a producing asset that is making good money. Where can I find information on this valuation?
SQM wont start adding supply until after 2020 and even then its only expected to add an additional 100Kt of Li carbonate equivalent by 2024. Same goes with ORE yet they will only be supplying an additional 7.5Kt of Li carbonate to the already planned 17.5Kt Li carbonate expansion. So that equates to an additional 125Kt of Li carbonate over a 4 year period beyond 2020. Not sure what total supply/demand estimates are over that period, do you?
Mt C has undergone many improvements and is undergoing further improvements to increase recoveries to 75% which means it will become much more competitive and while Mt C has been mothballed before you would be hard pressed to find any similarities between the companies operations back then to what they are now. Also I am not sure of COP comparisons between Mt C and its peers. Do you have any info on this?
I would surmise that future supply predictions take into account all projects that have plans to become a producer. Without knowing exact details I can only assume not all of that supply will make it to market as existing producers take market share and expand capacity. While your right that no truly knows how Li demand will pan out, the same can be said for supply.
While long term supply/demand may be affected by the recent SQM announcement, I don't see it having a negative effect over short to medium term which leaves me to believe that the current sell off is a complete over reaction. So unless the "analysts" supply/demand projections over the next 2 years have changed significantly, I am expecting GXY SP will recover over short term because as we know the company is currently making good money and will continue to do so for at least another two years IMO.
GXY Price at posting:
$3.47 Sentiment: Hold Disclosure: Held
