Hi kingharris,
The sp began to fall following the PFS because the market did expect better figures. What the market didn't understand was that the PFS was only based on:
Less than 10 percent of the resource.
A very conservative Li price which has increased by circa 30 percent since.
An area of the resource where there is less tin, so we didn't see these values to offset the overall cost.
Keith said following the PFS that the first thing they were going to do was an expansion study to update the figures in the PFS to rectify the above. This involved infill drilling in known areas where there is more tin, to offset the costs. It also involves re working the figures based on the higher Li price. The infill drilling has been done. The revised figures IMO are known, but the Czech elections have got in the way, due to all the political posturing. When this political nonsense has blown over, we will get the results.
Regarding the political nonsense, the following is a translation of the Czech article which fingers posted earlier. It is from the PR service of the Czech press office:
'Myths and facts about the extraction of a strategic commodity in the Czech Republic.
Is the lithium mining case on the C£nans only a political bubble and a witch hunt or is it really threatening that the Czech Republic will be tormented by foreign corporations? The whole case seems to be just a purposeful pre-election political trick.
Representatives of the Australian company European Metals Holdings (EMH) provided additional information to assist investors in their investment decisions in relation to the company. Whether the investment in EMH shares, which is already worth 1.7 billion crowns, will become a possible "golden mine", yet it remains a big unknown.
CEO of EMH, Keith Coughlan, confirmed at a press conference that the only activity of the entire group is interest in mining on the C£nans. It should not take long, the company should publish the results of the latest surveys. These are to refine the existing estimates of the lithium rocks in selected areas, or else on tin or tungsten.
EMH Chief Keith Coughlan is ready for further talks with government officials in the context of an expected new government garnishment. He believes that the signed memorandum will remain in force, which will help in the realization of the whole project. The company is not opposed to possible cooperation in the mining industry, for example, with Diamo, which some politicians spoke about. Due to the considerable investments needed to start mining, the doors remain open for possible capital input. Negotiations on cooperation throughout the chain of production have already taken place, for example, with the state-owned company Palivov£ kombin£t £st£ or with HE3DA, which is starting to build a battery factory in Horn£ Such£ near Hav£řov.
Jiř£ Zendulka, analyst, states: "profit for EMH shareholders, will actually cost the mining and processing costs, and the extraction costs themselves, in the context of revenues from the resale of raw materials. In keeping with the predicted expense, the project calculates the profitability at the price of lithium, respectively. Li2CO3 (LCE) over 5,200 USD, which can be considered attractive at today's prices. In lithium mining, on the one hand, the growth of competition may be expected in the coming years, but the demand will continue to grow dramatically. Just looking back over the past five years, the business of the Li-on batteries has almost doubled. In addition, large carmakers have finally woken up on electromobility now. Overall, in my opinion, we stand at the threshold of a new "industrial revolution," in which context there will be greater energy use of the sun, or short-term storage of battery power. "
Concluding, perhaps, just thinking about whether the various political pulls, especially the direct financial benefits of the mined minerals, are the most important. Especially when he himself did not care about C£novec all the time. Are there any other private entities in the Czech Republic who profit from the profitable mineral resources of the country, and nobody is crying out? Does not anyone use coal, oil, stone, limestone ...? Without some mined raw materials, our economy would have a major problem, import dependence would increase.
In short, some can not learn from abroad (for example, the USA, Germany), where they are much more aware that the benefits of a new direction of private business bring a much wider economic benefit. And they act accordingly. In Germany, even a mining company would not even have to pay any fees for extracted lithium. In short, doing business for the state brings other revenue. Whether from the point of view of direct taxes from employees or firms, VAT on produced products or VAT on products that can be bought by citizens through employment income.
In the case of mining in CIN, EMH speaks about 1100 jobs. In the case of a complete chain of battery production, more than 8,000 jobs have to be included, including supply companies. For Geomet, this study studies potential benefits for a state-run extraction of more than 700 billion crowns. Whatever the poles of the study, some of the mining benefits for the Czech Republic should be significant.
The boom of lithium batteries will participate in the Czech Republic, for example, only as a final montage in electrical vehicles.'
The political situation will blow over. The Czech government need this without delay and the whole industry and chain of production that follows (which is worth a lot more to the country). We will get the agreement based on the Mou signed. This will include finance and yes we may need to pay more tax to the Czech Government. We will also get the results from the infill drilling and expansion study at the same time.
I agree with Fingers. Now is the time to accumulate. I don't need to remind you of our current value based on our peers. Basically, due to the timing of the Czech election and the fact that the market didn't understand the PFS, what we have here is the 'perfect storm', in terms of SP appreciation.
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