Basically, its debunking the bearish comments by Morgan Stanley and others by presenting FACTS to show that they got it all wrong.
"The main reason for Morgan Stanley's argument for oversupply was the recent government approval in Chile for mine expansions which would “open up the floodgates” to new lithium product. That is referring to a deal struck in January between Chilean development agency Corfu and SQM, Chile's largest lithium producer, over lithium royalties in the Salar to Atacama, one of the largest and highest-grade lithium deposits in the world.
......What the bears seem to have in common is the belief that a rush of new lithium supply will soon hit the market, but what the analysts don't realize, or maybe for their own reasons neglect to mention, is that a lot of these mines will fail to deliver."
The report goes on to show how these lofty increases in production failed to materialise. For example, they explain, in 2012, major lithium mines planned to produce an extra 200,000 tonnes of new supply by 2016. But when 2016 rolled around, under 50,000 new tonnes came online, despite “expansions from existing operations”- a major under-deliver. In other words, the major lithium miners, despite their best efforts to double production in four years, were unable to do so.
Which is why BGS is still an attractive proposition as a lithium producer and why investors will continue to show an interest in getting this deposit into production ASAP.
The messages to come out of this:
1. Don't always believe the bears, despite how big they might be.
2. In a bullish lithium market its actually OK to be also bullish about lithium explorers like BGS- especially since the exploration results thus far point to there being one large lithium deposit sitting there waiting to be exploited.
3. We don't have long now before we see the AGM and the PFS. I'm optimistic that with the sound fundamentals likely to be announced that we'll be seeing a new uplift in our SP.
4. Patience.
BGS Price at posting:
49.0¢ Sentiment: Buy Disclosure: Held
(20min delay)