Although tempted to sell some at these levels I am not going to. Why?
The rising channel on the chart is textbook and showing no sign of abating.
It’s backed by fundamentals and hugely important newsflow:
- Carlton and BP33 showed excellent results, with both being open in various directions and depth. I believe what SB was hinting at the other day, “This is shaping up to be a project with a very long mine life” (or words to that effect, is implying a 15+ year L.O.M..
- $40m increases our capacity to 300 Ktpa (I don’t think it doubles capacity kiwi, would need to look it up when not on mobile).
- New CEO incoming.
- Hydroxide feasibility study imminent. Plant could be built in conjunction with Tesla and the NT Govt.
- All product pre sold and closely linked to spot prices.
- Industry expert Joe Lowry expects to see contract prices approach spot prices this year of around US$5000 / t.
- ASX200 inclusion in June.
Do some maths - all in costs even for our underground mining, will be around $500 Australian / t.
Say we produce around 250ktpa at A$5000 / t profit, that’s $1bn+ profit p.a., not even counting hydroxide or anything else.
That’s around half of PLS’s output. They are a $10bn company.
What’s stopping us being a $5bn one? There are no Li producers on the ASX under $6bn MC.
Enjoy the weekend folks. It’s been a fantastic week.
