First off, in the US this weekend we are celebrating Memorial Day. There are so many men and women out there that are serving or have served, they are true heroes and I just want to take a moment and say thank you.
I have been reading messages here for a few days. I would say a great number of them are from accounts with less than 100 posts and that I have never seen before, yet claim to be LTH, on many of those accounts if I search the history of their posts, they seem to show up only when a significant events takes place and only to post negativity. Some of these post even want to sack the entire board and claim Sayona has made many poor deals. I urge everyone to be vigilant, use the hotcopper search feature to see what these people have posted in the past and see how they operate, they are here for 1 reason and 1 reason only. If you have not used the search of history in the past I urge you to learn how to, your eyes will be opened much wider to the amount of scandals and manipulation that is here.
I quickly pass over those posts and look to the ones who post regularly, the ones who have provided information about Sayona, the ones who have spent countless hours looking under the covers to see what is there, the true LTH, we know each other, we speak on this forum nearly every day, and although we don't always agree, we do have respect for each other.
It is to that 2nd group that this post is to.
I did feel disappointed when the call for a CR appeared, I had hoped we were beyond that now but I also know there is much to be done in the next few years if we are to achieve our goals.
I want to point out something that has been in nearly every announcement, something that most pass right over and even in the current announcement it is still there. If you have not read this, please take the time now to do so.
In order to achieve the goals that we all get excited for, it will take money to get there. I follow many many lithium companies and am invested in several other than Sayona as well. One of the companies I follow is Livent and by extension Nemaska. If you follow the story of Nemaska it is similar in Nature to NAL. Nemaska had plans to become an integrated mine, they were to produce SC6 and convert it to hydroxide, because of huge cost overruns they went into receivership and declared bankruptcy. NAL was almost on the same trajectory, they planned to produce SC6 and have an integrate carbonate plant, when lithium prices dropped NAL was unable to pay their bills and also went into receivership.
The difference in these 2 stories starts afterwards. Nemaska was bought 50% over by a private interest and the other 50% by IQ. The private interest then sold to Livent. Nemaska's deal was secured 4 to 6 months ahead of Sayona / NAL. Is Nemaska in production even with a 6 month head start? No. The reason is money. Nemaska's first SC6 will not hit the streets for another 2 years even though they had a 6 month head start on Sayona.
If Sayona was ONLY NAL I would think this CR was a bit over the top. But we have to fund a Carbonate plant, we have to build out Authier and we need to move Moblan forward. Sure we could accumulate some profits from SC6 and over the next 5 to 8 years we could maybe get some stuff done, this is the track that Nemaska took it is slow and painful and while they are waiting for first production we will be getting started on our 2nd and 3rd project.
Here are a few of the other issues that have been brought up.
Q: Why did the company not announce the carbonate plant PFS or the Moblan DFS first, we would have been less diluted.
A: If the company had done this, I believe it would be highly likely that shorts would have accumulated and would have dumped the price down when the CR was announced. It would have been harder to drive the price back up without any new announcements. At 18c the shorts will exit, yes they get a free pass out which pisses me off, but afterwards we have 3 juicy announcements that will come and we will have our first shipment and first cash. Of these 2 scenarios I think you could make an argument for either one, but you have to chose one, I would rather have the price rising going into first shipment rather than under attack yet again.
Q: Why has the company been so quiet?
A: They have not been quiet, they have been putting out more announcements, more video presentations, more interviews and attending more tradeshows than I can ever recall. The amount of quality content out this year has been phenomenal.
Q: Will the company be able to ship what they say, and is this money being raise because they know production is weak?
A: IMO no, we produced 3500 tons in March and 7200 tons in April and by the 2nd week of May we had 15,000 tons at the Quebec port and likely more sitting in the dome back at NAL. My thinking is that if they produced 7200 in the month of April and they produced another 4300 (plus whatever is in the dome) in the first 2 weeks of May that they should have nearly the first shipment by the end of May. In a recent video the 15,000 at the port was quoted to be 5.7%, this means the other 15,000 only needs to average 5.1% to achieve a 5.4% avg. grade, this will mean faster production for the 2nd 15,000 tons. Each month has shown good improvement in production, they have reported even in the most recent announcement that we are on track. As you recall we are supposed to make 4 30,000 ton shipments by Dec 31, 2023. Nothing tells me that we are failing in that regard. Full ramp-up still set for October.
Someone asked for an estimated NPV values for Moblan and for the carbonate plant. I have done a few attempts on both, this time I tried to approach it from the PFS stand point where they use a smaller price for both Carbonate and spodumene. Even with this I am still coming up with over $4 Billion combined. That would place us at closer to 6.2 Billion when you add in our current NPV.
Lastly I will leave you with this. Brett has quoted 100,000 tones or hydroxide from Moblan. I actually thing his exact words were "Well in excess of 100,000" of hydroxide. Last year Albermarle produced 88,000 tones of hydroxide and their MC is $23.9 Billion USD or $36.1 Billion AUD. If we get there by 2030 will you even worry one little bit about this CR?
Time to enjoy the weekend.
(20min delay)
