Net leverage projected at 1.5x at the end of 2024E.
Net gearing ratio of 1.7 in 2025 and 2.1 in 2026
A value of 0.5 or less is ideal. In other words: No more than half of the company's assets should be financed by debt. Adjusted net debt at the end
of 2025 = US$ 875 million
in 2026 = US$ 945 million
Howard Klein spoke of a debt-free company in the latest podcast episode?
Focus is on expanding Brine capacities....Low cost South American brine will be most profitable... Estimated OPEX (cash costs including licence fees and transport)
Fenix $5.5-6.5/kg (Hombre Muerto)
Olaroz $6.5-7.5/kg
Sal de Vida $6.0-7.0/kg (Hombre Muerto)
Cauchari /Olaroz $6.5-7.5/kg (similar to Olaroz)
Unfortunately, I have not found any information on how high the proportion of technical grade or battery grade currently is. But it shows once again the cost advantages that result from the resource quality of Hombre Muerto. The nameplate capacity for lithium chloride (Güemes, Argentina)3 is 9 kpta ...represents the theoretical capacity for lithium chloride. Actual production is limited by a trade-off with lithium carbonate based on our current lithium production processes...The current output is 4 kpta. As I understand it, prioritised carbonate is produced in Fenix and the limitation is commercially justified. It makes little economic sense to convert expensively produced carbonate back into Li chloride.
Third-Party Funding
Attractive government project funding available (i.e., Strategic Innovation Fund and InfrastructureBank in Canada)
In light of the fact that two loans were recently cancelled, this information is remarkable. https://mineriasustentable.com.ar/contenido/12336/por-la-caida-del-precio-del-litio-arcadium-cancelo-financiamiento-por-us230-mill Quote: „Allkem, has cancelled two international loans from IDB Invest and the International Finance Corporation (IFC), a member of the World Bank.“ Allegedly the initiative came from Arcadium. I find it hard to imagine that the conditions would be much better than loans (US$ 230 million) from the World Bank and IDB Invest. Or did the loan cancellations come from the banks because recent employee layoffs were not in line with the loan terms?
Lithium Market Outlook:
Supply Deficit from 2027
Overall a good presentation.However, the slides with the "9 anonymous analysts(riders?)' forecasts were obsolete. Without sources, these are worthless to me. - Irony mode on - Arcadium is headquartered in the tax haven Shannon, Clare, Ireland. The predictions could just as well have been made by 9 members of a whiskey round table? -Irony mode off.-
Have a good start to the week
GLN Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
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(20min delay)