1) GXY analysis is spot on, there is a huge disconnect currently between the market and reality, and hence, why their are constant revisions from instos about their forecasts.
Somehow, the market believes the analysis of specific bankers, who have changed their mind, from oversupply to undersupply, back to oversupply with DSO, and now are split with their predictions. I mean these analysts have seriously changed their minds more than they probably change their clothes, but for ego sake, it's better to bs your way through, then admit you have no clue. Because that's what successful investors like Warren Buffett do, they claim to know everything, and refuse to acknowledge that they don't know something.......NOT. But hey what does he know?
Unfortunately, it seems as though having experience in a field doesn't matter: Bashing experienced analysis, (ie JL with 20+ years at FMC, an entire career, before shifting to a global lithium consultant on a full time basis), and trusting the judgment of those with the no experience in this sector (the traders and the instos), since they claim to be acting in your best interest, but are really pumping their own stock, and then jumping ship to the next.
2)ML's track record in lithium is 1/3, ?/4--yet to be seen
1) BGS history---Anyone want to tell me how that ended up? Anyone? You guys offered him a spot on the board, and then what happened? Where did he disappear to? Weren't you guys his top pick? Weren't you guys an African play as well?
2) Onto the next, the next CR in the DRC, go AVZ. Let's see how this turns out.
3) The FAKE LAC DEAL with Ganfeng and the Thai Oil, that didn't go through, that JL helped to facilitate. Oh wait, it's real and was confirmed by multiple different sources. Oh wait reuters is fake news, so is a news release from Ganfeng, I mean they want to mislead us with their brine assets, and their friendliness with oil.
4) PLS---he has successfully bet on PLS, and they will be a major player. Was he involved in managing the deals? Absolutely not.
--Conclusion: He's maybe a successful equity trader, that where his experience is. Negotiating lithium deals, and lithium management, so far has been 0% successful. 1 successful play with PLS.
Overall success rate: 33% accuracy
2) DRC---they're so many different issues with the Congo
Where do I begin: Artisanal mining, Kabila refusing to give up power and fighting wars, Congo changing it's mining code for new projects, they're expected to ask for my royalties (read about 20-30% royalties, a lot steeper than Argentina), setting up the infrastructure to provide reliable power (most existing mines in Congo will show you how difficult and expensive that is, if anyone has time take a look into how Glencore put in a billion dollars to develop its Katanga and Mutanda projects, and that should give you some idea.)
I provided a mining opex cost for a relatively small mine the Ruashi Mine that produced 10k tons of copper and 1k tons of cobalt---1,269 drillholes have been sunk on the Ruashi property over the years, and further drilling was conducted in 2003 and in 2005 to confirm asset size estimates.
[3] The project was developed in two phases. I
n the $31 million first phase, a concentrator was built at Ruashi using idle plant from O'okiep. This was to initially process existing oxide stockpiles. The Sable processing plant in Zambia was then used to extract copper metal and cobalt salt from the concentrate. Annual production capacity was estimated as 10,000 tonnes of copper cathode and 1,000 tonnes of cobalt carbonate. Phase two involved expanding the concentrator and building a new acid-leaching and SX-EW plant to produce copper and cobalt metal on site. In this phase, which used higher-grade copper ore from the Ruashi mine, capacity increased to 45,000 tonnes of copper cathode and about 3,500 tonnes of cobalt carbonate or metal.
[1] Capital costs of phase two were estimated at $335 million.
[5] Meterox, with debt of $2 billion in 2009, was forced to sell other assets in order to fund the phase two expansion.[6]
Conclusion: DRC is extremely volatile and risky, for just about every reason you can think of. Many companies (when negotiating with offtakes) will not be willing to take on that risk unless they are going to be given a considerable amount of equity in the project. Even more so, major automakers will want to ethically source their minerals and not run the risk of paying billions in dollars of fines, for being caught.
Hmm....who would you trust? And why?
