General Discussion Topics, page-127478

Would you call us "old friends"? I bear no animus towards you - nor anyone here (but for a couple for their mean spirited, false accusations and narrative) - but it would be a stretch to refer to us as "friends" - yes? We are opposed on many things SYA and all things PLL related and I wouldn't say it is philosophical at all ... we look at the common facts differently ... and make our arguments from what is in the end our opinion (conclusion) from these facts ... which may or may not be in agreement with others. Boxing Buddies???

Banksy is still posting. And only one poster comes to mind to trounce Whisky's verbosity (end ego).

But, thank you for the holiday season wishes and likewise ... celebrate safely (particularly tonight) and be kind.

Now I do recall though that a year ago (Dec'22) that you wrote that you "want SYA to go to 10cps" (your wish was granted) and the other thing you wanted was "for PLL files for bankruptcy" (your wish was not granted and remains as unlikely now as it was a year ago).

This is a (updated) picture I've referred to in past musings. I'm not saying its correct or complete and this particular variation is really just focused on the intersection of SYA and PLL, but to the best of my knowledge this is how it is, despite what is still being said in this forum. What I've tried to do is show, from the TopCo level downwards what the corporate structure looks like now and maybe what it may look like in 1 scenario in the future.

PLL's interests are "ring fenced" into Piedmont Lithium Quebec Holdings (PLQH). I sincerely doubt that there are any guarantees from PLL to PLQH and any recourse from the Sayona Quebec (SYQ) JV to PLQH and certainly not to PLL. I expect the same for SYA.

The first thing - I'll say forgotton or it may well be an epiphany for some - is that their is a Shareholder Agreement (or Deed) that governs the incorporated JV that is Sayona Quebec. It is this agreement that protects - for example - the interests of minority partners (in this case PLL) from any "predatory behaviour" by majority partners (in this case SYA) by requiring a "special resolution" to be passed by the board of the JV. This is a STANDARD CLAUSE of such agreements. This is exactly why PLL (and SYA) state that certain things require joint approval. If I set the threshold for approval at say 80% then both partners must agree. If there were 3 partners in say a 60/20/20 split and the threshold was 75% then the majority partner would need the approval of 1 of the minority partners to proceed. That Agreement sets out those board matters that require a "special resolution" to be passed. There should be no argument on this (but there is).

The second thing is, as I understand it, there is also a JVOA (or management agreement - call it what you will) for the managementof the day-to-day activities of the SYQ JV (and SYA would be entitled to charge for direct, reasonable and verifiable costsalong with a management fee). This would obviously apply to things like setting the operating budget and approvals (like the discussion when I said I doubted that any long term lead items would have been ordered (contrary to some) and that was also confirmed by SYA). It should not apply to operating activities as SYQ develops its own capacity in that regard. You really have to think of SYQ as a standalone business.

That's also why this notion of PLL "contributing" 25% of the ongoing Opex of NAL is wrong (and when SYA consolidates its financials with those of SYQ it makes it a challenge to separate them - something I've communicated to JB). SYQ makes "Cash Calls" on its equity partners - if SYQ needed $40M (for say working capital instead of any Capex) it would still make a cash call and receive $30M from SYA and $10M from PLL. Any cash that SYQ receives (from either the sale of SC to PLL under the OTA or from the JV making a sale on spot market) REMAINS IN SYQ ... as working capital, until such time as a special resolution is passed to make a distribution cash from the JV to the equity partners.

So here's my picture.





Now I'm looking ahead ... what I've done is separate the 2 main assets into mine/concentrator and a half built commerical refinery (yeah I know it has produced carbonate ... so I put the word "commercial" in to assuage some posters). There are multiple scenarios you could look at.

One of my favorites is simply that the operating mine and concentrator remains 100% in the JV's hands and that we (i.e. SYQ) enter into another JV - referred to as NALR with new partner(s). This could be an incorporated JV just like SYQ or even a listed company that SYQ puts to the market (think of this a spinning out an asset that in theory will deliver 30 years of dividends ... little bit like a utility company). If refining really is such a good business then there should be a stampede of investors demanding the 50% that SYQ is offering to sell (I mean its half built so that's our contribution - that's fair right?). We (SYQ) would of course be happy to enter into a long term supply agreement (at market linked prices of course) with NALR. I've made no suggestion as to tonnages here - as the expectation is to "break apart" the initial SYQ JV. This of course is likely to require a special resolution and with different business outcomes. For example - priority would be given to supplying NALR first (fixed annual volume ... guessing 168Ktpa) to appease any new partner(s); probably also expanding annual SC production (336Ktpa seems reasonable to me) ... not a random number just so happens to make the NALR supply agreement 50% of the NALM capacity. That "surplus production" may or may not go to PLL (remember PLL has LoM OTA) and may or may not have the same terms (there is obviously give and take necessary).

There are many forms that the future scenarios can take. The golden rule applies.

If anything, this forum should have learnt "to be careful what you wish for" and that a heavy dose of humility ought to be applied to most posts.