GXY (ASX) Banter and General Comments

@Mundo122

If you want my view of this, PLS owns 100% of one of the largest hardrock lithium resources in the world and is doing a terrific job of bringing the operation up to phase 1 capacity. It also recently got approval to go to phase 2 and has built substantial relationships in Asia and is also looking to capture some economic surplus from upstream processes.

The one GXY operating asset (MtC) is comparatively much smaller but GXY also owns a large undeveloped lithium brine operation in South America and another small but prospective hardrock asset in Canada. For example, in only it's second month processing SC6 PLS shipped more concentrate in Q2 2019 than GXY and was very close to beating GXY largest shipment for the year.

As SDV gets the go ahead and meets development targets the company should see an appreciation in the SP as the market factors in the fair value of SDV and/or JB going into production.

The other primary difference between the two is the amount of exposure to either hardrock or brines. Hardrock is increasingly being seen as superior to brine concentrate due to the variability in production due to inclement weather etc and the cost involved in producing lithium hydroxide which is being used in high performance batteries and although GXY has two hardrock assets it is clear that SDV will be the flagship asset in the stable.

So there is basically the more prospective element of GXY largest asset being undeveloped with the associated risk/reward profile and also the brine v hardrock issues. You can read more about these issues here:

https://tsxmedia.com/2018/07/17/not-all-lithium-mining-is-equal-hard-rock-pegmatites-vs-lithium-brine/

The contrasting approach to the company's Australian and Chilean projects is driven by battery manufacturers' rising demand for lithium hydroxide rather than the traditional industry benchmark product, lithium carbonate.

Australian producers, who extract lithium from hard rock, are increasingly viewed as the cheapest producers of lithium hydroxide, reversing the traditional industry dynamic which has ensured the lowest cost producers are those in Chile and Argentina who turn briny water into lithium carbonate.

https://www.copyright link/business/mining/albemarle-expedites-australian-projects-over-chile-20181109-h17p4y