Hi all,
It has been a while since I have posted on the forum, but I have been reading and enjoying (generally) the commentary. I was one of the buyers near the open yesterday (added a bit under 900k shares), not because I had some inside information about some impending announcement but because I thought the time was right. I figured CXO was due for some attention soon and felt that it was imminent, so I decided to increase my holdings.
CXO has been oscillating around the low 20's for a little while and it felt like it was due for a run. It would appear that either lots of other investors felt the same way or indeed there is an announcement that could spur the market due in the near future. Let's remember though that the last run went without any real news - the movement now could simply be that CXO has taken the breather that it needed, and now it is ready to continue its upward momentum until it reaches fair value.
I (like most of you) have been watching the lithium price increase, and the latest post from the company suggests that the price is now approaching $700 US/t. I had a look back at the latest forecast CXO did in June 2020 for how the company saw lithium prices to 2029, and it is fair to say that there is a significant difference in the forecast price then and the actual price today - the prices that we currently see were not expected until 2023/2024 (see below).
Current pricing is nearly 30% greater (they were expected low 500's in 2021) than expected and will have a fundamental effect on our DFS, especially as the prices are not showing any signs yet of slowing down. It is a great time to be invested in any near producer or actual producer. If the run that appears to have started yesterday is sustained, it could be the start of our next re-rate. If the experts in the field expected the above for pricing and what we are seeing in actual terms is significantly more then there could be some very good quarterlies released by those producing and this influence should flow over to CXO.
In my mind, there are many reasons for CXO to continue to be noticed by the market:
1. Technical fundamentals: As a few of the astute technical minds on the forum have posted recently, from a technical perspective, CXO should be closer to (if not above) 50c based on lithium and lithium potential alone, and looking at out peers in the market we are still undervalued.
2. Company Fundamentals: CXO has so much going for it with our current resource, the new tenements, plenty of capital to explore, gold, silver, copper, uranium, and major projects status. Not to mention operating in an environment where cash is cheap and the potential for future revenues are really strong (and getting stronger) - the upcoming DFS should be really insightful.
3. Momentum: We definitely have momentum on our side and that was part of the reason why I thought it was a good time to increase my holdings. I mentioned a while back that when management mentioned Hydroxide, it seemed like they had taken a page out of the PLL playbook. Given PLL's current SP performance, this definitely doesn't seem like a bad thing, and it seems that CXO is following a very similar SP trajectory to PLL. To me, it is unlikely CXO will reach the same heights given the smaller resource, but being closer to mining and having so much land to explore and the cash to explore it should count for something. Given PLLs rise also, we may see FOMO kick in by investors that don't want to miss it when CXO goes on a run as well. See below for PLL and CXOs charts:
CXO:
PLL
4. News Flow: There is so much news to come for CXO which should keep the market interested. There is nothing more painful than a bored market, but hopefully CXO should be able to keep the punters engaged with a constant stream of announcements.
A great time to be invested both for those that have been around a while and for those that are new. The potential has started to be realised, but we have a ways to go yet.
GLTA.
(20min delay)