GLN 0.00% 11.5¢ galan lithium limited

Share market is very interesting, it really plays with your...

  1. 161 Posts.
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    Share market is very interesting, it really plays with your feelings and investing in explorers is definitely not for the faint-hearted. Not financial advice but if it's not for you, you should look at "safer options".
    When we experience big drops in SP like this, I always go back to the fundamentals and get the pros and cons. @paulgf has explained it very well and I think he is spot on. We kind of put ourselves in this position raising only what we needed at the time to order long lead items, etc but not enough for stage 1 CAPEX. So sooner rather than later, we will run out of money and will need some to finalize stage 1. Again, we are not talking about this being in 3 years time but if we expect revenue to start in the next 18 months, we will need money rater quickly and I have no doubt this is contributing to the SP drop. But really, 12 months ago, how many of us (me first) would have been thrilled to top up at $1? Since then, we had a quite compelling DFS for stage 1, increased our resource, strengthened the board, have a clear strategy to get us to production in less than two years.. Not many negative and we can now top up in the $0.60. However, who is topping up now? Not many people but this is how money is made IMO. Very similar situation to what we were experiencing in 2018 - 2019, we knew we were undervalued and not many people were topping up in the $0.10 but these people have made a lot of money now, even with the recent drop.

    Macro sentiment is definitely what is bringing us down, all lithium shares are down in the last few weeks and hard rock with Australian projects is clearly the preference right now. I'm still 100% convinced that people don't understand lithium shares yet and that's why brine is not the "flavour of the month". I see on twitter and HC people thinking that PLS producing 650Ktpa is much much larger than GLN potentially producing 35KTPA of LCE when it's exactly the same amount of LCE at the end of the day. People don't understand the conversion factors and don't understand yet how genius (IMO) it is to sell chloride. Again, @paulgf explained this very well and he is right too by saying that because we would be the first one to sell chloride in this lithium 2.0 wave, there is still a lot of unknown (actual price we would get for it, who would buy it, etc).

    I strongly believe our chloride will be sold in Argentina for phase 1 to AKE/Livent who seem to have issues to extract enough brine to reach full capacity and stage 2 onwards will hopefully be sold overseas.

    A lot of unknown still and I agree that when we get an offtake for chloride, things should look much better.


 
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