galaxy update, page-40

Damn, if my wife knows about the share price, she is going to cut me into pieces and feed me to the dogs...

I'm guessing the mid-year report is going to look very ugly. There is a good chance that the accountants will want further impairment provision on Mt Cattlin now that it is essentially a dead asset. Plus all the start up cost at Jiangsu, Galaxy's net asset value probably would equal the value of the little 2bd apartment I'm living in...

Although, as a willing and unwilling long term share holder, I'll look beyond these accounting numbers as what is really important is the Cashflow, how much it is and how far away it is.

Hopefully, the mid term report can give us a bit of hint as to:
- How close are we to get some 99.99% degree output?
- What price is Jiangsu getting on the "better than normal" technical grade lithium carbonate? The last valuation report is quoting a long term price of USD6500 per ton. Are we getting anything close or have to wait until the purity gets better?
- What operating cost is Jiangsu producing at. Again the last estimation we have is about USD4500 per ton. I would accept a higher number given the start up phase but how much higher?
- What is the inventory level in terms of both quantity and amount. It will then give us a rough idea as to how long it will really take before Mt Cattlin can start producing again (given we know roughly 8 tonnes of spodumene wil be consumed to produce 1 ton of lithium carbonate).
- And probably most importantly, the cash forecast for the coming 6 ~ 12 mths.

Unfortunately experience tells us that the management so far has been really "shy" in disclosing any of the information explicitly. Yet more unfortunate is the fact that I have no other choice but to wait with my fingers crossed. Things that are holding my faith at the moment are the facts that:
- Lithium demand has been strong, not from broker reports of sort of EV futures but facts that there are queues outside major lithium suppliers in China to lock in supply.
- Lithium price has been heading north and putting itself in a different league to the rest of the commodities.
- Most of the other lithium stocks are performing strongly.

These all point to the fact that whatever is happening to GXY share price is driven largely by internal factors not market factors.

Maybe there is really a need for some management shake-up.

West Coast

Thanks for your posts in dark times like this. Much appreciated! Just one thing to point out, Creat is not pure Australian, they have a lot of Chinese links.