Strongly favouring South Koreans and Japanese over Chinese, I don't see a definite assurance of North Asian investment, given that much of the recent interest in Argentina's brine sector seems to originate from Chinese entities, such as Gangfeng's stake in LAAC or CNGR's potential acquisition of LEL's Solaroz project. However, there's a noteworthy exception with Stellantis' investment in ALE, which also operates on the Rincon Salar.
The primary challenge that some stakeholders will confront relates to valuation. No one is commanding a premium in the current market, and JZ can't delay a strategic investment much longer. Consequently, he'll have to accept whatever the market offers, given his weakened bargaining position. While I'm confident he'll secure some form of investment this year, I doubt the terms will come close to what could have been achieved had he sealed a deal a year or two ago. The terms will likely become evident soon, as we'll be able to discern them from the price received for the existing stockpiled product. Some may be surprised when the operation doesn't turn out to be as profitable as anticipated.
For those anticipating a significantly inflated strategic investment, LEL's proposed sale of Solaroz should serve as a reality check. A$97 million for a project with a net present value of A$6 billion, boasting a higher grade resource and five times the resource size of AGY's Rincon, puts things into perspective.
AGY Price at posting:
13.0¢ Sentiment: None Disclosure: Not Held
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