In case you guys haven't seen this video, there's an interview of Rodney Hooper by Crux Investor. If you have been following lithium for some time, you will know who Rodney Hooper is so I won't go into his background. Refer to this link where I have it skipped to when Rodney starts talking about some pretty important matters concerning lithium, but obviously watch the whole video at your leisure. https://youtu.be/Mj_LhpSxAYM?t=497
A few key things I picked up in this interview:
- It is apparent that the generalisation of overall lithium over/under supply, production costs, methodology, pricing cannot be lumped into 1 category like it has been for the most part since MS came up with the oversupply report back in early 2018. Clear distinction has to be made between industrial quality and battery grade. And even battery grade may not be enough for commercial production (discussed below) so it needs to further reviewed.
- Even though new forms of lithium production are being innovated e.g. DLE and clay etc, the qualifying of battery grade lithium is still the same. They still need to go through qualifying their product, pilot plants, scaling etc.So it may aid those pursuing these methods to produce lithium down the track at potentially a more effective way, but there is still long ways before they can be proven at a commercial scale and still need to take time to get to this stage.
- Industrial grade lithium can still be viable commercially, but margins are capped. Battery grade is where it is at, but this is not enough, you can still produce battery grade lithium that isn't fit for purpose as it is important to refine the particular impurities that still exist for the respective OT'er of the produced product. Hopeful producers need to go through a battery supply chain qualification process, as different cathode manufacturers have different impurities that they don't want. The way I see it, there is Industrial Grade, Battery Grade, and Qualified Battery Grade. We have been working to get the 3rd category and from the sounds of it, we are very close!
- It is recommended to invest in companies that are capable of producing battery grade lithium that has been qualified. 'Qualified' being the key thing.
- Ganfeng, livent and abermale are part of an 'Exclusive club that many are looking to join'. Apart from these matured businesses, no explorers are close. It is expected that most will either look to partner with them or 'pinch personnel in order to get the job done'....does Pablo ring a bell?
What does this mean for AGY? I bet as you were reading the above, a few of you guys would be drawing the correlations with Argosy. What has been an educational realisation for me over the past 12-18 months (having been invested in AGY for over 4 years), is that the qualification process the company has been going through is actually the final key component (which should unlock OT and funding) at proving we are ready to join this 'exclusive club'. The biggest frustration for most of us LT holders I feel is that we were learning and appreciating this process with a time lag concurrently with the company in a way, where there has not been much commentary on what is required and how long it potentially takes to qualify product, in the marketplace. The recent Benchmark Mineral Intelligence slide that did the rounds that showed a rough product qualification timeline and what it involves is probably the first formal literature I have seen on it from memory aside from commentary provided by JZ through his announcements and correspondence I have had with him. With Rodney confirming this qualification process, it has given me 2 bits of insight:
1. The time it has taken for potential OT partners to test our product over the past 12-18 months is more or less justified as noted in one of the above points from the interview. We have had to prove we can produce BG LCE, but also produced it specifically at small then eventually larger quantities at unique specifications to see if it fits the purposes of respective cathode producers. If only the market was educated on this 12-18 months ago, then I'm sure there would have been less questions such as "what is the product being tested again?", "I thought we already sent samples", "how long does it take to test product?" as examples, where some of these have been asked by myself numerous times.
2. Other hopeful producers who have recently been able to produce viles of BG lithium, this is only the beginning for them and they have their own 12-24 month period of product qualification. I now fully understand when JZ says the company is best positioned for when the lithium market picks up again. We are truly in a more advanced stage than our peers. We are knocking at the door of this exclusive club for sure. We just need to prove we can deliver the goods.
To put some other investors minds at ease, I can tell you I have experienced the exact same emotions you all have. I have experienced doubt, frustration, I have sent some angry e-mails to JZ over the years, I have contemplated selling, I have questioned why things have been done or not done, but what I can tell you is that as the lithium market continues to be educated, it is slowly becoming apparent that AGY is actually taking the right road to become the next BG lithium producer, a near term goal many hopefuls are far from. Hindsight will prove this right once the company gets to this point, but hearing the commentary lately that draws many uncanny comparisons with the pathway AGY has taken thus far fills me with immense confidence we are heading for big things. Once funding and OT are hopefully secured by the end of this month, the only thing we are waiting on is sentiment to return and I think we will begin to feel the turn in the AGY tide. The market will begin to notice.
Whether it's learning to accept the new timelines compared to my initial expectations years ago, my own maturity in the market, my own education in the market, I am absolutely comfortable with where this company is going, and with my reasonably large shareholding (by my own standards), I am looking forward to the next 12-18 months once our plan is close to completion. We will officially be part of the exclusive club and the market will be forced to accept it.
(20min delay)
