EVERY Lithium company in the world is facing contract pricing...

EVERY Lithium company in the world is facing contract pricing lagging behind spot pricing, including PLS. Seriously, go read their quarterlies. This isn't an ORE specific issue or some Toyota conspiracy, it's just how commodity markets work. That auction was only on a very small amount of uncontracted volume, and combine that with big demand and you get some wild pricing. If you tore up all the contracts and threw everything onto the spot market then supply would drastically increase, which would consequently reduce the prices. This is basic supply and demand people. The real lithium price is somewhere between the contract and spot prices. If prices go on a steady decline (which they will eventually, as all commodities do) then you'll be here complaining that they didn't lock in contracts at the higher prices.

Over time the contracts will level out again. We're just dealing with crazy, volatile times, and you're not always on the right side of it. We knew lithium would bounce back eventually, but no one was predicting that prices would go up 5x in less than 10 months. Truly wild.

Just a side note, while ORE still produces a mix with technical grade lithium, technical grade lithium is hardly worthless. It tends to track about 10% less than battery grade, which makes it still very valuable. It may not even be worth it to convert it up, depending on the gap.

I'm seeing people talking about the slow progress on SDV. SDV has sat there for over a DECADE doing absolutely nothing, and now the ink isn't even dry on the merger and now ORE is 100% to blame? Give me a break. This is entirely on Galaxy's management. As other companies advanced their projects into construction and then production, SDV just sat there. I suspect that as parts of Olaroz Stage 2 get completed they'll move construction teams over to SDV. Given the continued pandemic craziness and global shipping and logistics issues, I think that's the best we're realistically going to get.

We'd always like things to go faster, but is this fundamental paradigm shift in the energy and transportation markets going to be all over next year? Of course not. We're setting up a company for the next 50+ years. We know things are progressing well, we can see it directly on the satellite images that the Olaroz ponds are being put up at a good pace. It's a big project, it takes time. I'm sure we'll get some SDV news as Olaroz Stage 2 continues to progress. Maybe ask about it in the conference call when the upcoming quarterly comes out.

While it's frustrating to see all that red with ORE, with the ASX at 4 month lows and the whole lithium sector tracking sideways for the last couple months, we're not alone. The markets seem pretty jumpy right now, and when the markets get spooked it's the more speculative companies that get dumped first, but when optimism returns, they're the first to rise back up again.

ORE has a lot to look forward to over the next 12 months as Naraha and Olaroz Stage 2 start to come online. We're in that boring "orphan" period where all the deals and hype presentations are all done and it's time to put shovels to dirt. Other hard rock miners on the ASX are still in that hype period and are doing deals and getting nice share price boosts as things de-risk, and PLS has benefited from the auction results. Spodumene is definitely in fashion right now.

It's worth reminding ourselves what ORE (or should I say, ALK) is and isn't. The brines have the advantage of big resources and low production cost, but are complicated and slow to set up. Hard rock is cheaper and easier to get online, but there's only so many ways you can dig up rocks and grind them up. ALK is very much the long term, low cost, low risk play. It simply takes time for the low cost part to play out, as it produces a modest benefit over a long time (the life of the project). Being cheaper and faster to get operational is very beneficial at first, but less so as time goes on. The most successful mining companies in the world aren't the "cheap to set up" ones, they're the big boys with huge deposits and tiny operating costs compared to the sector. They can scale up hard, survive the commodity cycles unscathed, and spend decades being absolute money printers. That's my bet on ORE, they'll ride the waves and keep up the steady growth and momentum as other companies slow down once reality sets in. And let's not forget about the potential upside with DLE, imagine that as a pre-processing step!

I don't know what you should do with your money, in these wild times anything could happen. But I'm happen to leave my money where it is, all the long term factors are just as strong as ever. Buy some hard rock too if you want, you're allowed to own more than one company. Every half-decent lithium company is going to make a fortune once things really start to heat up.