Also, on this part:
“The 2kt pa plant is really a pilot commercial operations before a much larger commercial operations and would really only be able to operate in its own right under higher lithium carbonate prices. The nature of scale. It may have even been idled if working with no issues from scratch.”
This appears inline with what the company stated.
afaict they are concerned - based on various pricing and market forecasts - that if they spend more money getting the 2ktpa plant humming and producing, that they may be operating at a loss. …and we know that is not sustainable for a business with relatively minimal cash that is also spending on other prep work for the expansion.
Imo they could do that for a while, but that would be seen as reckless by many if the lull persists and they chew through the cash they have.
Iirc cannacord estimated/assumed $14k/t opex for the 2ktpa plant. Interesting. IF that is close, then the ramp up opex would be higher still afaik.
Iirc some “well known” forecasters are calling $11k/t pricing next year. Whether that occurs or not, their forecasts get attention and may arguably have some basis. Dyor.
So, what might that look like?
We spend say a few mil getting the filtration circuit updated/replaced, then lose another few (3?4?5?6?) mil next year selling at a loss…?
Then what?
We CR at peanuts, while those in the HC peanut gallery “politely observe” (lol) our loss-making operation…? Or we then shut the plant, with no money in the bank?
The focus must be on the long-term survival and prospects of the business. Tough times have called for tough measures, and there is no Time Machine to do it differently, unfortunately.
Oh the joys of being a junior developer!
GLAGenuineLTHolders.
Imo
Dyor
AGY Price at posting:
3.8¢ Sentiment: Buy Disclosure: Held
(20min delay)