Interesting you reference ' Value ' in the same breadth as ' Making a Decision to Invest ' .....whether deemed right or wrong. But the main thing is that ' Value ' or ' Valuation(s) ' can be determined and compared on many different levels.
And there has been a lot of recent talk about GS and CS this or that .....and the presumptions that they are somehow the ' Smartest Kid ' in the class .... Debatable at best I would think.
And whether or not either have had an effect on the market in Lithium equities or not, I'll tell ya what ......irrespective of what you might think , I would still see that Pallinghurst Group as actually representing the ' Smartest Kids ' in the room.
And because not only were they perfectly situated with one sitting at the front of the classroom listening .........and right in front of the dumbfounded GS who keep asking for the lecturer to repeat the same questions over and over again , the other members of their elite squad of high achievers were conveniently located at the back of the class and closet to the ' Exit ' doors in reshuffling their Lithium exposure portfolio at what seems to be in hindsight the ONLY player with the insight , timing , and selection in ' Optimally ' timing their re-balance.
Now the timing and reasons for their decision has always intrigued me . Was it because they couldn't list Nemaska due Quebec's preferences against listing. So if it was, then Pallinghurst has just leveraged their asset value to an elevated exposure to the volatile share markets and not under the protection of ' Mommy Dears 'Quebec ' nurse apron. So why would they do this ?
And what then of their previously well stated commitments to Quebec of $1 Billion of investment forthcoming in this industry ? What has become of all of that ?
So I ask myself :- Is this a ' Smarter ' way of exposing yourself to the vagaries and volatility of the markets rather than the safer confines of the ' non listed ' enterprise ? Maybe it does because by doing so , it effectively removes itself from participating further in it's previous $1 billion commitment .....unless it wishes to further participate on the ' Equity ' raising level that Livent initiates.
So NO DIRECT INVESTMENT by Pallinghurst if it so wishes not to participate.
Again Why ?
So O.K irrespective of all these unknown answers as to Why Pallinghurst did this on its own accord or was pushed etc..etc.... , here's a breakdown of why I will keep coming back to this very relevant ' Mystique ' of the Pallinghurst / Livent / Quebec....Lithium Industry transaction as being the one which is most pivotal and potentially shines the most guiding light to any future directions we might also experience with Sayona's SP. ie catch-up or move in line with.
O.K so Pallinghurst who only paid $70 million for its original 25% stake in Nemaska turns around and sells it a year and a half later and JUST before the GS lithium market opinions and effectively gets 5.5 times it original investment at the Livent prices used on 2nd May 2022 of US$21.37.
So then even after achieving an initial 33.6% gain on that transaction just 2 days later on 4th May , it is still up an effective 15.44% based on Livents closing price 2 nights ago and still 3.7% up based on last night's further down move on Livents price.night.
So effectively it ( Pallinghurst ) spends / invests $70 million a year and a half ago only to now currently reflect a return of over 600% in arriving at its equivalent total investment of US$431,716,740. ( Now around U$400 million based on last nights move )
So we can then contrast this to say Sayona who invests a total amount of $315 million across JUST the Moblan Asset acquisition PLUS the $190 million working capital asset improvement / expansion funding at a weighted average SP of 16.6 cents and as of close of yesterday was effectively DOWN $64 million compared to the effective Market Value pre the Moblan acquisition which effectively means we've theoretically lost A$379 million in relative valuation compared to Pallinghurst's gains of over US$430 million which it acquired on JUST its 25% stake in the OTHER failed Quebec Lithium Company Nemaska it made 9 - 12 months earlier than NAL.
So if this isn't bad enough a reflection of our ( Sayona's ) investment ability versus Pallinghurst , if we go back to the beginning of August 2021 when the NAL transaction hadn't even effectively closed yet , we had an approximate Market Cap valuation of around $750 million .
So effectively this means that even after adding what amounts to a $400 million asset in NAL to the balance sheet by the end of August - as of yesterday we were only valued at $385 million more than we were at the beginning of August and before the transaction finally went through.
So what this does is simply get me back to my first inference where at day before yesterday's closing valuation of $1.071 billion , we are ONLY currently reflecting what I would refer as the CORE NAL transaction while at the same time clocking up TOTAL losses in acquisition and working capital from BOTH the Moblan and current raises of $379 million .
So my final question then to the Markets ....and Sayona Management to a certain degree is ' Who Invests this Badly ? ' I mean who loses almost $380 million when others who are buying similar assets ( ie Nemaska ) are making over A$600 million on their own ' SIMPLE ' straight up in and out lithium transactions.........
I mean we ( Sayona ) cannot possibly be that bad of an investor right ? Or equally , Pallinghurst surely cannot be that much better to have seen a more appropriate way to invest in the exact same Industry at more or less the exact same time and given the exact same circumstances of Bankruptcy proceedings ........
What I also like with the Pallinghurst / Livent transaction is the ' Guidance ' which was emitted from the announcement of the sell down by Pallinghurst Managing Partner Ane Frandsen stated :-
" We will merge our interests in an all-share transaction and our investors are excited to continue to be exposed to Nemaska as long-term shareholders in Livent," said Arne H. Frandsen and Andrew Willis, Co-Founders and Managing Partners of Pallinghurst. "We are committed to the success of Nemaska through our investment in Livent, as part of the development of Pallinghurst's broader battery materials presence in Québec."
For the past eighteen months, the Nemaska team and its shareholders have invested significant resources in securing the future of Nemaska, including progressing an optimization study focused on improving and enhancing the entire value chain from mine to battery grade materials
Theconclusion of this optimization study and a final construction decision are expected by the end of the third quarter of this year. Nemaska is expected to be a fully integrated asset with 34,000 metric tons of nameplate capacity of battery-grade lithium hydroxide with first production in 2025.
So what I then find fascinating is that the end of the 3rd Quarter o 2022 is obviously September and BEFORE the latest time the Quebec General Election can be held on 2nd October 2022. Will Sayona ultimately be part of these final ' Construction ' decisions which we ( Sayona ) say will be occurring for us in Quarter FOUR 2022.
And the fact that these TWO similar studies and decisions I presume are ONLY ONE QUARTER apart from one another speaks volumes for Sayona given we didn't start our NAL journey until virtually 12 months after Pallinghurst and Livent started theirs with Nemaska.
It's also strange that we haven't heard BOO from Piedmont who literally 2 months ago had suggested it would be releasing details of its final decision on location of its SECOND LIOH plant..........
So I guess bottom line here is there is an abundance of LIOH Plant or prospective Plant news in the Pipeline just in Quebec alone ......
(20min delay)