@billyen I like the way you think...
I've been wondering what affect this FMC spin off will have on all lithium stocks, and in particular to Galaxy.
...Why did FMC choose to spin off only 15% of the business?
When it comes to lithium production...
"FMC Lithium's current production of lithium hydroxide is 18,000T/y, but it is expected to increase to 30,000T/y by 2019 thanks to, among other projects, the debottlenecking efforts at the Argentine facility, which will add from 2,000T to 3,000T of lithium carbonate during 2018 and some more during 2019."
Recognizing that the initial thread article quotes 40,000 tonnes, but Joe Lowry indicated in his various communique.. What FMC do, is very different to what they say... a lip service... words with no substance. - As his article was titled
"Better to be Lucky than Good"
No doubt we will see a big ramp in promises from them between now and the IPO, in fact the last FMC hookup was the last time we will be hearing any great detail about FMC Lithium.... Until its spun... and on the other side...
At least 15% of it anyhow for rumoured $500 million.
Is it worth U$3 billion? (by my calcs around U$3.3) Anyone that has been following Joe on this question would know that by the sum of its parts, he does not believe it is worth anywhere near that. - I cannot recall if it was in one of his
podcasts or an interview somewhere in the inter webs.
This might not be the right way to go about it, but if 15% of their 18,000t annual lithium production is 2,700t, then that prices their market cap at U$185k for every tonne of lithium in production. - That's just based on reading your article Billy and the others I have seen.
If they have boosted it to 21,000t by the end of this year then that 15% ownership increases to 3,000 and brings that market cap per tonne down to U$167k
Here's the reason why I am so interested in FMC, and I think that any other lithium investor should be too...
In my case, I have my Galaxy which produces 200,000 tonnes per annum of lithium concentrate that is converted to lithium chemicals.
***Apologies for those that know this, and probably in a more detailed way, but so everyone is on the same level of understanding here is a basic overview.***
The usual calculation that people might use to work out how many tonnes of spoodumene go into producing one tonne of lithium.
8 tonnes of spodumene per tonne of lithium. Some spodumene produces more, some less.
Say all going well it was 8 tonnes for Galaxy, then that means we would be capable of... (if vertically integrated) to produce 25,000 tonnes per annum, or...
...Almost 30% more LCE's than FMC with 7,000 additional tonnes.
The gap here is the conversion, and also the reason why I am ever so curious about Galaxy's tolling agreements.
(Tolling is when Galaxy pays for a converter to turn their spodumene into lithium for a fee after which Galaxy sells it)
The above is also, part of the reason I would like to see L-max operating at Mt Cattlin, to boost up those numbers.
Another thing of interest is that Albemarle are said to be considering spinning their own lithium division off, and are seeing how the FMC Lithium IPO goes.
Maybe
@Subs you can summarize all this for me too?- Be gentle, I'm a delicate petal.
Whilst re-rates are probably being factored in a little now, once that POSCO deal is finalized, and also that JP Morgan deal, then we might see the numbers start running.
Problem we the lithium community have as a whole is that the market just doesn't understand us....
What I mean is.... it isn't coal... But probably closer to iron ore... however this time... Australian companies are interested in that step right at the end which produces a final product.
There was something else I wanted to say.... but I lost my train of thought with the vacuum cleaner in the background.
...and once again.... its time to join the Sydney shuffle.
Oh yes.... Anyone else noticing this constant flow of small shares at whatever price Galaxy is sitting at...
It isn't going up, nor down... just buying at the last traded price.