With a spot price of circa US $/t SC6 battery grade equivalent of $750-$1000 over the past 6 months is all I can say is good luck. I'll believe it when I see it. If the lithium price materially increases then we can have a different conversation but at these prices I am highly sceptical and for good reason as per my initial comments and below. Trust me, if Galan was that profitable for stage 1 (at these current spot prices), capex for stage 1 would have been fully financed by now, banks/lending institutons would have been throwing money at Galan as there would essentially be no risk, they would be guaranteed a return on their money (interest) and have zero concerns of Galan not meeting principal repayments. Yet, Galan shareholders find themselves being diluted to oblivion to fund stage 1 capex and needed to use an ATM facility to cover overheads and corporate costs....
Like I said before, not even the major lithium companies who are producing at full capacity (300-400 kt per quarter for Greenbushes who is producing SC6 battery grade material from 95% of their operations which has quality management, compare this to Galan's expected production of 5kt for the full year, with JP at the helm....). Greenbushes and others (pilbara minerals) have managed to reach peak economies of scale, which significantly assist them with limiting overall fixed costs because as production increases, those fixed costs are spread across a larger number of units, leading to a lower per-unit cost and therefore making these companies more competitive and profitable, yet they are still struggling to make money/profit per quarter. I think I have made myself clear and not going to bother responding to some of the Galan shareholders who appear to have rose tinted glasses on. I am not knocking Galan (no lithium companies are making money at the moment or at best very little/breaking even), I still think Galan has one of the best brine deposits on the asx and has long term potential assuming SC6 prices increase long term which allows companies to produce sustainable profits year on year. Galan still need to increase production significantly in order to be relevant. I do think 100 million undervalues the company which I have openly stated before, many times. Cheers, CP
GLN Price at posting:
12.0¢ Sentiment: Hold Disclosure: Not Held
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