GXY (ASX) Banter and General Comments

Originally posted by ljcamp ↑

I dont like the thought of a JV in a Chinese converter.

Would GXY be better focusing on A40 script offer to increase resource size in WA and production of 6% spod.

Then with $250m cash use part of this to build a hydroxide converter in WA.

Both bald hills and MC feeding the converter (400,000 t pa or approx 50kt LCE) and shipping directly to battery producers. approx US$500m revenue @ US$10k pt.

Cash flow to support ongoing development/construction at SDV. If an JV come along with proper offer, then accelerate and start James Bay.

I think GXY need to take control. We need to be in the drivers seat on pricing. Its BS whats occurred of late. No worries we will be the bank of Galaxy and cop the cost of production while you take your sweet arse time to access liquidity. Its just not on.

The board need to get ahead of the curve. JV in a converter will just result in the Chinese partner getting a JV in the battery production further down stream and then we are back in the same position, screwed on pricing at the converter level.

Unless SDV can supply directly to battery makers, we will just be dictated on prices moving forward.

Thoughts?

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If Galaxy want to be in the driver's seat for pricing as far as I am concerned they need to get into downstream production of lithium chemicals.

As of Friday the value outside of Galaxy's ownership in A40 that we know of is ~$115 million. This does not take into account the various debt arrangements that A40 have structured.

We have seen that Jiangte took extra time to settle their buy in, and who knows if they can come up with further funds to keep their supply arrangement in place. That remains to be seen.

I am not sure if I would be keen to see that amount of dilution at this time when it probably isn't necessary, coupled with the debt that we would then become responsible for. No doubt also none of their shareholders would be open to coming across at the current value either.

I'm not saying I am right but we need to consider this pragmatically and logically in order to receive the best value for Galaxy holders and the investment we currently hold in that company.