@kevin103 "I am just wondering if there is any possibilities that SQM partners up with Wesfarmer to buy out KV for the $1billion" I don't think Wesfarmers would like and need to make a JV with anyone. They already have a JV with SQM and SQM is now controlled by Tianqi (24% of SQM owned by Tianqi). Tianqi owns 51% of Greenbushes. Albemarle owns 49% of Greenbushes and 60% of Wodgina (MIN owns 40%).
Wesfarmers has the power to override all of those other lithium majors. And It's Australian.
They already have $1.5b budget. My min price tag for KV is $1b. If they buy KV they will still have $500m. Then they would need another $500m to build a concentrate plant and chemical plant. I don't think financing of $500m would be a problem for Wesfarmer.
Just think one thing; big money is circulating in the lithium market. Tianqi paid US$4.3b (AU$6.3b) for buying 24% share of SQM.
So why not Wesfarmers wouldn't be investing another $2b for a huge Tier-1 resource on its own land.
GREENBUSHES
You said "We believe it is these very high grade sections underground spods that makes Greenbushes so unique and valuable and why Greenbushes productions are so much better in terms of quality that all of its peer producers".
That's correct however Greenbushes hasn't got endless resources. They have 120mt @2.4% Li2O or 170mt @2.0 Li2O (last years numbers).
They have two plants running there, and at very high ore process ratio..;
1) TGP (Technical Grade Plant) for processing high grade ore (3.5%-4.5% Li2O) with low iron (0.25%-0.1%) for making technical grade spod concentrate for glass and ceramics industry.
2) CGP (Chemical Grade Plant) for processing lower grade ore (2.0%-3.2% Li2O) with higher iron (0.8%) for making chemical grade spod concentrate which is SC6 standard - for battery industry.
Greenbushes will run out of high grade ore very soon; around 2024-2025 because their ore process rate is now reaching to 10mt a year. We don't know how much ore they have atm if they have 160mt at 2.0% now they will run out of whole thing in 16 years; in 2035.
After 2025 they will have to blend their ores (they are now mining those two types of ores from specific locations of the mine, they are doing discriminative mining. The blended ore grade might be less than 2%.
Therefore Tianqi is still looking to buy something if they can find anything other than KV deposit. They search for lithium in their own ground and other grounds didn't give any good results.
Current situation is; I beleive that KV deposit is under the microscope of Wesfarmers. Tianqi was watching all details of KV project by a magnifier for a long time as well. SQM is in Tianqi's hand IMO. SQM would not do anything but Tianqi would. Albemarle satisfied with Wodgina deposit atm, therefore I don't they would do any other move.
There is no other major to buy KV deposit I guess.
The trading pattern might look like KDR's pattern in the past however I don't think LTR's sp atm is not fair atm, can't compare it with KDR sp which was around $1.20 right before its takeover. That's all about the market cap.
KDR's market cap at that price ($1.2 ps) was around $500m. And yes we know it had 3 offtake agreements at that time. LTR mc is only $130m at 8.5c. Which means 1/4 of KDR's price before takeover.
If you are going to ask me how LTR's sp would go up before takeover, because it's hard to see a takeover offer at 60c for a stock which has 8.5c sp!
That's correct. That means we will have to some magic moves from TG before the takeover or JV offers IMO.
LTR Price at posting:
8.6¢ Sentiment: Buy Disclosure: Held
(20min delay)