Good to hear positive views on GXY. The SP is clearly a concern...

Good to hear positive views on GXY. The SP is clearly a concern and I for one am still mulling over the issues, but anyway, a few points in my opinion and apologies for the brevity.

1. First, thanks Mick for clarifying GXY's debt position as your post 07/05/11 gave a lengthy analysis based around your view GXY should have continued the loan. You said as example, "If GXY had to continue the $105 mil loan it would have cost the company $8.4 mil over the next year." (Post #: 6685894). Ah I see, they have continued the loan!

2. As also commented above Talison's share price has tanked and it's around the same as GXY's which suggests the harsh pull back is in fact industry based so any great analysis of the flaws with GXY or conspiracy theories based on the drop in SP are seriously weakened by this fact and it is not just hard rock miners, ORE is down 52% and catching up. However Byron capital have recently started coverage on Talison's with a target price of $6.55, which is heading well north and others have Talison's at $9 (Paradigm capital) and $7.25 (Cormark Securities). GXY's position on the Global X lithium EFT fund has also increased to 3.67% and is a considerably greater stake then Global X's 2.51% investment in Talison's, suggesting there is good industry support for GXY as well.

3. GXY has already forecast high production cost due to plant shut down and modifications required (as I said before), so the June quarterly is unlikely to assist guidance on steady state operating costs. GXY also note in their HK doc that ramp up operating costs will be higher due to lower tonnage for a fixed cost base.

4. Beyond any interest in Mt Cattlin being cash flow positive, in my opinion GXY can only really be evaluated at the point of revenue creation. All they are doing with Lithium Carbonate plant is maximising their mineral refinement to maximise price which is just smart. Lynas Corp (LYX) are using exactly the same integrated strategy. As a fall back, if GXY's refinement of LC to 99.9% grades and above does not work, or any other expansion plans are shelved, or GXY is not given any premium for being in a high growth industry, then thanks for some assurance of a 96cent SP safety net.

5. I wonder if GXY will follow LYC's strategy of taking on a partner for the next step of battery production (in LYC's case with magnets) and here the Geely connection may also be interesting.

Cheers.