As many of you know I am here since I bought at 2.1c in March 2019. I was in lithium stocks since 2015. I was following LTR since Sept.2016. I didn't buy in immediately but followed its all announcements until I bought in. Then never sold it out. Research, research and research.
Yes it's still very cheap according to the financial calculations I have made on the other thread, hence not selling out.
Takeover is always on the table. It can be taken over at the right price.
No need to put a price for a T/O offer for our like. It will be decided by the market conditions and Tim Goyder. I'm fully behind Tim in any case of T/O offer, friendly or hostile.
Time is the essence. It's working in our advantage, the later the takeover offer is the higher share price offer.
When time is the essence, the patience is the key.
The market fundamentals is telling the story; "You guys and gals must be patient, today its good but the future is fantastic"
It's all about supply and demand.
What the supply and demand balance says is the key.
Let's have a look at what it says. (I have disregarded what Goldman Sachs said and waited)
Here is the graph by BMI (Battery Mineral Intelligence) which was poste here before. BMI is the leading new energy mineral research and price identification platform company. BMI tracks all the lithium projects, battery factories (planned, under construction and existing).
According to this chart we are at the beginning of looming lithium deficit. The lithium deficit is going to be widened in the coming years, especially after mid 2026.
The brownfield expansion (the expansion of existing mines) are not contributing much to the supply side. In the long term there will be no effect from them and the existing resources will be depleted because the mines will be running out of resource.
As an example according to my calculation I have done 3 years ago which was also presented to Tim Goyder on Feb.2020 by me on a private meeting, the biggest and best lithium mine Greenbushes will run out of its ore around. Greenbushes has invested huge money for expansion and has 3 train of processing plant. They are mining at the highest rate possible. All of their attempts to find new resource to feed the plant for the future have also been failed so far. They couldn't get permission to make exploration around the existing mine because it is national forest. There is no viable project around them to transport the ore to their plant. They don't know what to do atm.
The highly probable and probable section on the graphic is the key for the deficit. That part contains projects in exploration and development stage.
Also, there are different kind of lithium resource types in there; some lithium brine project with low grades, some geothermal brine projects which is not proved to be economical, some of those projects will be using DLE (Direct Lithium Extraction) technology which is not proven, some of them are also in location which will not be permitted to be operated (like Vulcan's project in the middle of Europe, also RIO had to stop its project in Serbia because of people's protests), some in conflict zones (Like AVZ's project in Democratic Republic of Congo), some states they can extract lithium from clay, some are in very cold areas in Canada (the cost will be very high),.. etc.
Also financing of those projects should be done on time to comply with the project timelines. The low profitable projects will struggle to find finance to start the construction and production of course.Therefore in the real life it's not happening as easy as it looks in the graphics. It'd be good if 70% of those highly probable projects and 50% of probable projects are realized and commenced production in time. That means the lithium deficit will be worse than the one shown on the graph above.
As you can see on the graph above, just see the years 2021 and 2022, even a small deficit gap between supply and demand causes lithium prices skyrocketed as it happens today.
How the deficit will be closed and demand will be met?
The inferior, low grade, hard to extract lithium resources (which are not economically viable for today) will be mined. There is no doubt about that. Miners of those inferior resources will still be making good money because the lithium prices will remain high for at least 3 decades.
We will be benefiting from those high lithium prices indeed.
As you can see on my calculations on previous my post LTR will be making huge profits and giving huge dividends. That is the apparent future to me unless the WW3 happens or an asteroid collides to the Earth shortly.
I'm patiently waiting for production or T/O. No way out.
LTR Price at posting:
$2.19 Sentiment: Hold Disclosure: Held
(20min delay)