I am assuming this is an honest question. Here is my honest answer.
I do not actually hold PLL, and never have, but I do own small holdings in SYA and A11, among five Australian Li mining companies. Both SYA and A11 have JVs with PLL, so I have been paying far more attention to PLL than I normally would a stock I do not hold.
Here are the recent signs:
1. PLL's entire business, until they get at least one of their refineries up and running, is buying spodumene from NAL (and eventually Ghana, probably in 2026) and selling it on to Tesla and LG Chem. It’s not much of a plan, since they’re bleeding money out the corporate rectum, and have been since their inception.
2.They had been indicating that they would be receiving a US DOE grant for construction of the North Carolina refinery.Now that’s out the window, and they’re “hoping” for a loan, “sometime in the future.” In fact, they appear to have angered the local community, and have barely managed funding for the land acquisition.They’re $100Ms and years away from this plant becoming reality. They actually have the permits to begin construction of the Tennessee refinery, but "are taking 2024 to evaluate their funding strategy." That's from their own website, BTW. In English, "we don't have the money to start construction."
3.PLL has recently had to sell their entire stakes in both SYA and A11 (Atlantic Lithium, with the Ewoyaa Project in Ghana).These are companies that PLL have their entire supply business on, the equity of which was for deals that required PLL to make large CAPEX expenditure commitments.
4.PLL just recently announced that in addition to selling their SYA an A11 equity stakes, they’ve had to make 27% of their staff redundant. I don’t care if you’re the local grocery store or WalMart, when you have to reduce staff by 27%, and it’s not because you are selling a division, that’s a BAD sign.
5.PLL’s balance sheet at year end (31 Dec 2023) indicated a cash balance of U$72M, but U$49 of that was from the sale of their equity stakes in both SYA and A11.They’re cutting flesh from the bone just to keep the balance sheet positive.
6.NAL still needs to complete ramp-up, the NAL LCE Plant still needs to be completed, and Atlantic Lithium’s Ghana Plant has only just acquired their mining license, with construction MAYBE starting at the end of this year, but more likely next year. PLL is supposed to pay the first U$70M of the Ghana CAPEX, plus their share (45%) of the remaining U$115M. Oh yeah, they also have U$988M of CAPEX to build the Carolina Project and U$809M to build the Tennessee Project, as well.Until they build at least one of those two refining plants, PLL is really just a broker, on-selling spod, as per #1, above.
7.As bad as the above is, and this is a bit sneaky if you’re not paying attention, their 2023 Earnings Presentation and a recent (Feb 24) Investor Presentation both show their look ahead 2024 CAPEX budget to be U$10M-U$14M.
As bad as selling your shares in much smaller companies that you have important JVs with to make ends meet on your balance sheet is, and even worse, having to make 27% of your work force redundant, the real concern, in my humble opinion, is that PLL has AT LEAST U$2B of upcoming CAPEX requirements, and they plan to spend U$10M-U$14M next year?They need to be spending that next WEEK.
Best regards
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