...yes the company did tell us they want to go down stream, but the AFR article is the first time we are being told the company wants to do it via a processing plant investment in China (which doesn't really surprise me at all given the costs of building one in Australia)
The part about it being the first time we are being told the company wants to go downstream isn't really new information. But if the news want to report it, and people finally take notice. That's great also.
Galaxy has been there before (downstream) and returning to lithium chemicals production is a logical step. (Vertical integration)
Also, if you go back to I think it was the 2018 Q2 earnings call right near the end you will hear discussion with Anthony about share holder rewards and the company plans for tolling and having its own conversion facility, or as Anthony put it at the time... (And again yesterday) potentially even taking part in what I am envisaging a much larger one. Hence what I have determined at this time is the reason for A40 being pulled along also. We are going to need a bigger boat... Or is that a bigger fish to put in the boat?
Conversion also takes place within the L-Max process... and by that we can safely assume (without making an ass out of you and me) that lithium chemicals is part of the company future. *Thumbs up* <-- smiling so hard his lips touch his... Hang on.. where are his ears?!
I am also incredibly appreciative of the investigative journalism that AFR have been providing. They even knew about Anthony Tse sharing a cup of tea with the head honchos of Panasonic. My only disappointment is that they didn't have any photos to share at the time... Besides...What happened to those discussions anyway?
Incase anyone missed it... On the other thread... If you would like to hear the company. Check out my other post over here...
As Anthony points out, there is conversion capacity sitting idle at this time. From what I understand this is mainly because they don't have access to the materials, and even if they did their cost to produce will make it far to expensive and uneconomical to operate. The ramp up of a converter is fairly similar to that of a concentrator. It isn't like turning on your hair dryer.
Owning the materials along with having a big wad of cash places Galaxy in a position of strength during any negotiation process, particularly if there is debt already associated with the construction of that asset. No different to what occured with Jiangsu for us those many moons ago. - We are sitting on the other side of the table now. Our wallet stuffed full of cash has us leaning to one side. Looking like we are going to let one rip or like we have had some kind of butt enhancement done and the other cheek gets added at the next appointment.
That butt enhancement cost us nothing... Just 40 or so tenements that held very little value in the overall make up of the Sal De Vida DFS.
If someone gave you a number of years of Mt Cattlin profit upfront whilst at the same time took nothing away y'd be over the moon. What is that's what happens to Sal De Vida. The re-animation of Mt Cattlin included prepayment. Though by the time everyone realises there is little to no supply availible that is not already claimed, it will be too late. Listen to the part where Anthony talks about the Gigafactories coming online and the demand for energy storage continuing to rise whilst some lithium companies are selling off the plan and still trying to get moving. But if those blocks of land never eventuate to shipping a single rock, or anything more than samples for potential offtakers, the delays will slow down the energy storage movement, or given the trade wars provide one country with the upper hand over others. Take for instance what is occuring with rare earths.. lithium perhaps might not be far off from the same scenario. This trade war mightould end up well in our favour.
"Beijing is gearing up to use its dominance of rare earths as a counter in its trade battle with Washington, according to a salvo of media reports in China that included hints from the state planning agency. Stocks of producers surged.
The U.S. shouldn’t underestimate China’s ability to fight the trade war, the People’s Daily, a flagship newspaper of the ruling Communist Party, said in a commentary Wednesday. It isn’t hard to answer the question whether China will use rare earths as a weapon as retaliation in the trade war, the paper said." link
Either way, the company as well as you and me @Wary 1 should be a bunch of the happiest folks in the lithium community. We are sitting on a lean that is the envy of the town.
One thing I noticed is that whilst Martin was painting his picture of the 3 locations the potential suitors are from, there was also mention that there are 3 different direct extraction techs being tested. If direct extraction cannot work at Sal De Vida they might as well toss them away because they won't work anywhere. The low impurites present in the SDV brine make it the ideal/perfect location to test and use it. - science and stuff.
Another thing... If Galaxy wanted to bring a partner onboard whose to say that some of that negotiation doesn't potentially include part ownership in a converter... And some other further downstream operations.. hypothetically of course. Y'know, just saying that's a possibility. Just so that potential partner can guarantee the availability of further supply down the track.
And look at that, Livent is less than $950 million now. How will Paul turn it around? More promises of expansion should do it, with a sprinkle of future hope.
These guys have the money and a currently producing project in the area. They have been promising to expand even into other countries like Australia. Some might say they are a 1 trick pony... I just wonder, what's all the dithering about?
GXY Price at posting:
$1.54 Sentiment: Buy Disclosure: Held
