You and those agreeing with you are so fixated on the SC6 price and other ancillary issues that you seem to be missing a few important details. Please let me remind everyone of a few facts.
1. Most of LTR's production is already spoken for thanks to OTAs with Tesla, LG and Ford. Tier 1 OEMs, not Chinese, and each with a market cap in the tens of billions of dollars.
2. You keep quoting SC6 pricing, but one of the few facts we do know is that all three of our OTAs are formulaic, based on the market price of LiOH, since that is what all three will be turning our (actually) SC6 into, and why they all wanted to purchase from a high grade source. Our quality, and the fact that our partners will have facilities designed to process actual, clean SC6, will also keep our partners from running to the spot market when prices dip below contract floors unless there is a significant difference. As stated in the follow-up announcements since the OTAs were announced, the price we will be receiving was designed to get fair market value for the SC6 AND the a portion of the margin associated with conversion to LiOH.
3. Since neither you nor I, nor anyone else that isn't involved with the agreements knows the precise formula to be utilized in each, or other terms of the OTAs, we are all speculating, but I am confident that there will be reasonable, we at least break even relative to our DFS floors associated with those contracts, both because our BOD has outsmarted essentially everyone other than maybe the PLS BOD, so far, and because of the timing of our OTAs.
4. Related to Item 3, above, the three OTAs were announced on 2 May 2022 (LG), 30 May 2022 (Tesla) and 6 June 2022 (Ford). Lest anyone require a reminder, this is only a short time before the price of Lithium peaked. At the time, just as there is now an unfounded dread regarding how low Lithium prices will go, today, their was "irrational exuberance" concerning how high Lithium prices could go, then. OTA terms at the time were so in the favor of the miner/suppliers that not only did all OTAs have floors, some even involved pre-payments, to fund CAPEX (regarding LTR, specifically, we did get a debt facility out of Ford, but there was no upfront cash I am aware of).
5. The people that have the best sense of what is happening with LTR and the industry in general, and I'm not talking about the analysts making commodity price predictions, the Joe Lowry's of the World or all of us armchair Warren Buffets, but the miners and middle managers of the Australian Lithium Mining Industry, are leaving other firms to come to work at LTR/Kathleen Valley. Many of these people are leaving existing jobs and moving their families to be part of LTR, which is hugely significant. READ THE ROOM.
As has been said by other posters more eloquently than I would, we (which includes you; I see you are a holder, which makes me respect your dissenting view more than the non-holders) are invested in a mining company, and they are NOTORIOUSLY cyclical, as are the underlying commodity/commodities we produce. We happen to be either at or near a pricing cycle bottom, right now. I say that with some confidence because we are already seeing producers go to M&C and explorer and development firms beginning to be starved of funds unless they have excellent news, meaning that supply is just now beginning to be constrained, even as demand continues to grow. As another person recently posted, if prices are so low that LTR is losing money when they begin production then woe be unto most other producers and the supply of Lithium around the world, generally.
Throw in the odd black swan, like SQM's announcement last week that protesters have shut down their Salar de Atacama brine facility, which happens to be the second largest producer of Lithium on the planet, and the supply v. demand curve could turn more quickly and sharply than most are predicting, much like the down-beaten shipping industry has seen rates double just since the Houthis started lobbing missiles and drones at passing vessels last month. Salar del Carmen, SQM's other major facility in Chile, is where they process the Lithium Chloride from Atacama into LiOH and Li2CO3, to the tune of 180,000 metric tonnes per annum (think LCE), but Atatcama is where the brine comes from. That's A LOT of supply that will be stopped if the protests last long. You can't count on that sort of thing, of course, but if those protests in Chile go on for more than a few weeks, they WILL begin to affect Lithium prices.
Best regards to all (even JRSelvedge)
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