Got around to listening to the call and spending more time on the reports.
Obviously everyone is hurting with the share price where it is and really given the floor pricing and the profit we will achieve this year I think LTM has been unfairly judged and the share price should be higher than where we are today.
While we would all want all assets developed so that we are really for the next turn in pricing, the reality is that we don't have cash to do it, but nor does anyone else other than PLS and maybe SQM. There is at least 10 mining projects out there that would have gotten up if pricing was better, but there is no way they are getting funded in the short term. I suspect it will take at least 24 months for demand to soak up the current oversupply and the delays in all these project (including ours) is setting up for the next up cycle.
Some highlights for me of the call was when PG said that some (but not all) of the new volume that is coming online in 25 is already contracted with price floors in place. That is great news as I had assumed all new volume would be at spot pricing. This is a good hedge for us as we get good pricing for some volume in this down market and upside for remaining volume at spot.
I was interested in why fully dilutive shares increased so much which they called out is due to $245M in 2025 note being converted. I had assumed that we would be rolling over that debt, but looks like they can convert to shares. I had a search around for the terms of the notes and if I've read it right, there is a floor price of $6.47 USD a share, you would then need to apply the modifier from the merge where they got more shares per 1 of AKE, I think you apply around 0.6 to it (someone correct me here), so current floor price is around $3.80. The dilution isn't great, but if there is a floor price and we are below that then it probably makes sense to convert and have the extra fire power for development.
Lets face it, we can all complain about management etc, but we would be flying high if spot pricing was $30k, I don't think anyone, including the experts thought we would be at $11k. All we can do is make the best discissions based on the environment in front of us. I'm not sure that I would be doing too much different to what management has announced, so we just need to ride it out.
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(20min delay)