Share
1,025 Posts.
lightbulb Created with Sketch. 51
clock Created with Sketch. 15/07/21
12:49
Share
Originally posted by Kiwisfly9:
↑
I think the general trajectory is why Stephen is so confident. He knows that he's got a golden ticket with this project and that one way or another, this mine is a goer. It is simply a question of when and how big our resource will be. Global demand trajectory, state actors trying to curb climate change and major manufacturers like Tesla and VW Group have already decided what's gonna happen and the world is going to be in a lithium production deficit by the end of the year (albeit it, a modest one but the retail investors who follow the tabloids will cotton on soon enough). Spodumene prices seem to have quite a bit of variation in reporting prices with some places suggesting that the price could be high as 800 USD a ton, some suggesting the average price is 735 a ton (prior to yesterdays rise) and others such as Metals bulletin are reporting a spread of 690-750 per ton. Given yesterdays rise though, I think we could say very confidently that the price is likely somewhere in the 700-760 range at the very very least, which means if Tesla and other companies are on track to hit their targets, we will see the first signs of a pinch in the next few months as chemical producers in China and Europe seem to be keen on purchasing 3 months worth of supply in advance as a general rule and the squeeze will probably begin to start around the end of Q3/ start of Q4. It's this reason too that I believe that the company won't sell this up. We might score some good money by today's market cap and some holders might happily cash out at this point but the down stream profits we would be kissing goodbye too would be like taking pennies for the pounds. I can easily see the Spod price in future being upwards of $1000 USD a ton (and likely a lot more than this in 2022 and 2023) so even if we are looking at a price of 400 USD per ton to process it, would it matter if we were pulling in 400-600 USD profit to start with? What if the price was 1500 USD a ton? Would it be worth taking a buy out if could be clearing 200+ US Million dollars a year profit without us even building a hydroxide plant (which would what, double to triple our profits again?). And all so we can remain a Junior Explorer? Even with money thrown at our other projects such as the gold or the Uranium or the copper (if they stack up), its still a minimum of 5-10 years to get a project on its feet (and could be very difficult in the case of the Uranium). In that time, we could use our cash flow to develop those projects anyway while collecting ever greater profits along the way, particularly if the resource size does actually grow. Why settle for so much less when we know the writing is already on the wall and the company could be filthy rich if it just lets this project reach full maturity? I'd rather see us turn into a small mining empire than a Junior who flips projects for a living.
Expand
"Why settle for so much less when we know the writing is already on the wall and the company could be filthy rich if it just lets this project reach full maturity? I'd rather see us turn into a small mining empire than a Junior who flips projects for a living."
(20min delay)