Originally posted by Ozyoioi
It's funny how this might look so obvious in hindsight...
Here are the facts:
POSCO is meeting with officials (most recently yesterday) in Salta and Catamarca to discuss plans for a Lithium operation in the
Northern part of SdV (arguments both ways whether when they mean northern, they mean northern of Salar or Northern of the previous GXY tenement, or perhaps both). POSCO are also building a processing plant in town.
GXY have stated that it's not a secret POSCO is working on trialling material for its POSLx plant
POSCO want to move forward at a rapid pace, they are targeting construction mid-late 2019. Seems unlikely they would be able to move so fast unless someone had already done some of the work to bring this near a state of a project FID...
POSCO took a shipment from SdV AND Mt. Cattlin in the 2H of 2018. Relatively small shipments but paid a premium for them.
It appears there is now another small 5000t shipment (AAL Nanjing) heading to POSCO (presumably a GXY shipment to POSCO again). Why would they repeatedly take spod from Mt. Cattlin unless they were in some way going to acquire or benefit from supply (or perhaps there will be a new offtake??).
There were some questions at the quarterly that had some very subtle undertones regarding speculating whether POSCO is the JV partner and that the final piece to official progression is the transfer of tenements for US $280m.
My gut feel:
News is imminent, specifically, GXY POSCO JV on SdV including downstream processing.
POSCO to provide technical support on SdV development + cover the remaining development cost, fast track development using unconventional technology which will be proven up by 3Q 2019 (commenced in 3Q 2018), FID by EOY 2019.
POSCO to also take a small stake in GXY (at market share price or perhaps slightly higher, bargain from their perspective anyway as they are simply buying back the money they gave GXY for the northern part of SdV + laughing as they get a stake in SdV South)
GXY, rich with cash, to take a stake in other Li miners at the current market discount price and/or announce a small dividend or better yet, announce a share buyback of undisclosed duration and size.
Might fall in the immediate term but the risk to reward looks comically good IMHO.
Shorts now at record levels and highest on ASX call it 'good hunting over boys' and start closing en masse.
Short term share price appreciats to $2.30-$2.50 range.
Longer term return to $4 which I think is fair valu in a positive market until new revenue sources.
GLTA!
What do you think of the POSCO offers to T/O GXY @4.50/s scenario?
