All good. To be honest, there's no value of me sharing information on this forum, nothing I say on here impacts the company.. but I have a guilty conscience for profiteering in the last couple of years so it's still self-serving in a way but thought I'd share the love. Also, old folks like me should really impart our knowledge that's become second nature and we take for granted, to the next batch of 708 investors. After speaking with some of my colleagues, they say walk people through my thinking process so that's what I'm doing... although I'm getting a bit tired now writing on here, but washing my guilty conscience now and I'll just comment later "I told you so".
Yes, you're right its Rio Tinto not BHP. I couldn't edit my mistake so thank you for correction. I probably wouldn't have invested in EUR if not for the cancellation of permits in Serbia - it's a massive boost to Wolfsberg project. It's hard to explain on a forum but I'll try...
Take a look at this map that was in my advisers' report. An average investor would look at this and see the information given. People like me look at this and see what's missing. Can you see what's missing? BMW, Mercedes, EVE, and the second CATL battery factory only recently announce in Hungary. Why is this important to Wolfsberg project? And why end July was a turning point for EUR? I invested in EUR just before the BMW announcement, so safe to say BMW saw the same thing I did.
Things to consider:
- Europe currently gets 87% of lithium from Australia.
- Companies in the industry want to onshore at least a some, to address supply chain disruptions and diversify for resilience.
- The biggest hurdle in Europe is high environmental standards that mining takes forever to get over, hence VUL succeeded in Germany as they are net zero target since day one
- Companies like BMW pride themselves with knowing all their end-to-end supply chain (so no accusations of inadvertently supporting forced labour, environmental damage etc)
- Almost everyone in the industry has been planning around the Serbia mines, which was planned to provide 30% of Europe lithium needs.
- CATL second EU battery gigafactory wasn't a surprise, they've been planning for a long time, and Debrecen is a perfect location.
- EVE was hunting for location as well but if you're on the ground, it was pretty obvious they'd choose Debrecen as well
- Debrecen is located smack in the middle of lithium mines, but the target was Serbian mines and Ukraine
- Dec 2021, Austria announced "Masterplan Rohstoffe 2030" - providing a moat for Wolfsberg project
- Serbia cancelled mining permits in Jan 2022
- Russia invades Ukraine in Feb 2022
- With no end to these headwinds in sight, it was frantic on the ground, everyone's plans were upended - should we wait to resolve issues, should we look for alternatives, should we do both?
- Wolfsberg releases sneak peek of DFS confirming commercial viability
- EUR does a cap raise in April 2022 raising attention on a mine that's been 10yrs in the making and ready to go
- Everyone goes back to zero and ask about environmental standards, political headwinds and can this mine actually deliver lithium chemicals (end product) let alone stand up a mine
- Wouldn't you know it, Masterplan Rohstoffe 2030 provided the moat to address risks and headwinds
- BMW and Mercedes starts enquiring. BMW in particular has been on my watch list because they kept declining that they'll do a Tesla (which everyone else followed and BMW is now late to the party) for car manufacturers to get down to mine level offtakes to secure chemical supply
- Guess who supply BMW and Mercedes their batteries? EVE and CATL!! And their activities weren't exactly made secret on the ground - who they're talking with, where they are going, etc.
- This is when I invested in EUR
- It took 3 months from cap raise to get things in order but, BMW secures a n MoU to thwart competition and buy time for an offtake. Mercedes not far behind.
- CATL finally announced what everyone already knew - battery gigafactory in Debrecen
- EVE, in competition with CATL does the same thing two weeks later
- where is the lithium coming from and why did these companies go ahead with factory plans years in the making announcing this month? Factory will be ready 2024/2025. If not Serbia or Ukraine? Austria. Hence confidence in announcing the "go ahead" green light to build the factories.
- Wolfsberg is not the only mine in Austria (room to expand) but well advanced, which fits perfectly in the 2025 supply security timeframes, steps to get to 2030 goals. Further, EUR has their hands on Donbas lithium for future expansion once that part of the world settles down, they will need investments and economic activities.
- CATL and EVE is purposely in Debrecen in the middle of Balkans, Austria and Ukraine, also close by Romania lithium hydroxide factory.
Look at this map again. Can you see the supply chain now?
Perhaps with exception of VUL, EUR is the only company with a ready to begin investment/mine, proven end product (99.96% grade vs VUL's ~60%). Wolfsberg project conveniently replaced Serbia lithium projects without having for companies to change too much of already plans years in the making.
Above observation was confirmed in my eyes even further due to the share price movements. The surge was most likely investors buying at market value, so it pushed the price up, to what was available at the time. Price goes back down naturally as punters and traders weigh in. It settles roughly around 8.6c (cap raise price is 13c plus one free option per two shares, so 8.6c per share, so no surprises there).
Investors don't just buy and wait. Every astute business person and investor, once have a vested interest in a company, works by the mantra: "The best way to predict the future is to make it happen." Believe me, my office is also working to ensure a profitable investment with EUR.
When investing, don't look at the company too much.. more so on the project/s.
So, it's a no-brainer to me. Wolfsberg project is the perfect supplier, with all the ducks now formally aligning (note the word formally). Now is the best time to invest in EUR.
Is EUR is a well run company? Probably not but it survived 10yrs and through Covid. What's important is the project, and it's EUR that owns it. A project inside an EU country that has political certainty and good environmental records to manage expectations. Further, the company can expand. What's missing is a lithium processing plant... which the cap raise provided funding for land acquisition, and looking for a JV.
There are probably other factors in my head that I haven't been able to write down here, why I'm investing on EUR as opposed to other mines in the region... but that should be plenty to consider. Don't focus on the company (EUR) but everything around it and the missing information. What are the other players in the industry looking for, when and why? Where are they and who will they obtain supplies and who they are supplying? Most decisions especially from big companies happen in advance and planned years ahead - we're already talking about 2025 onwards lithium supply here.
Austria's Masterplan Rohstoffe 2030 and Serbia/Ukraine's frozen projects, this gives me great confidence and hence invested in Wolfsberg project. It is now (and most likely the only one) on the hot seat to fill the gaps of these years in the making, now holes in everyone's plans, and to make it happen to secure supply completing the chain for 2025 and beyond. Just need to get on with the job.
By "everyone", I meant BMW/Mercedes and CATL/EVE.
Hope this helps.
Oh and PS. The preliminary DFS pre-tax NPV is massive and it will only grow bigger from here, BMW's request to use the word "exclusive" usually means the client is pretty much guaranteed but just want more time for the finer details without the fear of missing out to competition (2 months apparently usually this takes at least 6), and the people/community on the ground asks, "just get started already" - they want the jobs. It's happening, silent investors just need to wait and be silent... or top up now while you still can.
My projected share price is 25c per share by October/November, maybe even sooner (Depends when things get done). But most definitely achievable 50c per share around Construction phase of the project next year. Personally, I don't care because my vesting period is to 2026 before re-evaluation so I barely look at the share price, and focus on my office ability to add value where we can.
