@skribbler
If Galaxy wasn't down-ramped so continuously by Cory through the year I wouldn’t have boned up as much on NMT.
Admittedly I don’t know all the details as well as yourself but
You’re wrong about -
Galaxy payments. They were split with GMM and now brought back into the fold. You tried to present this months ago and ended up halving half the numbers.
6% minimum. Spodumene percentage largely relates to how much ore is needed to be shipped and processed.
There is theoretically no minimum. Higher is better. Less shipping. Less processing.
4% requires 12kt. 5.5% requires 8kt. Marginal improvements for 6kt. This is for the creation of 1kt of carbonate.
Mt Cattlin pre-upgrade sold bulk tonnage before and could have done so again - no problem there.
Most of the upgrade was about increase in capacity and further incremental improvements to recovery. Mica and higher percentage were also improvements to the fine circuit.
Deutsche Bank already refer to it as 6% grade. It certainly is in the “no problem” quality zone. Clients had already paid down their deposits after inspection.
Some Chinese spodumene processors are operating at 20% capacity. Others have switched over to temporarily processing domestic lepidolite at a massive mountain for a teaspoonful. High iron content at Mt Marion is a fact. You’ll see soon enough that this presents an issue that has to be addressed at the mine or the processor - just as mica did for Mt Cattlin.
MIN - do have a history of build and walk away. You’d think they have a choice each time if the potential is great. No-one is forcing them to sell.
As to Ganfeng’s involvement. It was a bargain and sold off cheaply by NMT, wasn’t it?
Ganfeng can easily afford to buy a chunk of mine for the price of a shipment or 2.
Ganfeng want vertical integration. They want cheap spodumene for their own convertors.
NMT should have held onto controlling equity and mined if they wanted to be on equal footing with Galaxy.
Consider for a second the benefits that would have come to NMT from retaining a higher percentage of the ownership. It was a day-traderish decision.
De-risking and making fast money was fine - but it was an odd decision to hand back payments to share holders. At this time? When there are future plans to build?
I don’t understand this bit. Our sector is all about growth and speed to market.
Companies should reinvest all capital in making their companies grow faster for the share holders.
Galaxy has chosen the other direction. Merge with GMM and retain more profit and equity.
It is worth around $50m of shipment payments almost immediately.
And entry in the ASX200 - which we can already see has a measurable impact.
Last time I talked to you, I said that the last chunk of NMT equity would be sold and I was right, wasn’t I?
Seems MIN are now selling that same chunk at an additional profit.
There is confusion about the use of the word dividends that has benefitted NMT.
Some investors seem to believe they are some sort of profit-sharing.
The NMT “dividends" were paid as recompense for each chunk sold off. They’re not operational profit.
They negatively impact the future earnings of the company and limit it’s future share price.
Nor are these divvies going to be an ongoing thing as there is an expensive processor to somehow build and pay for.
The NMT shipment has been delayed already has it not?
The DFS was delayed as well. Same with the share buy back that was promised.
Rain has affected Mt Marion’s construction schedule too. We’ll see soon enough.
Galaxy’s 100% equity vs NMT’s 14% is not a contest.
I’d prefer to hold equity and reap the future rewards as it pays for asset expansion.
Add in the 2 other equity assets.. not even close.
I consider it quite likely that Chris Reed will continue on his path of selling assets and sell the rights to the ELI plant and off-take.
It’s his MO.
Since the large equity sale I consider NMT a marginal lithium play with it’s real profit potential pushed out to the ELI plant. Sorry but I do.
I’ve actually stopped referring to NMT when talking about Mt Marion and pretty much just use Ganfeng. They are the most likely to buy out MIN and possibly NMT
but interestingly the Gangfeng head honcho wasn’t exactly bullish on further expansion when he was here in Australia. Did he turn them down?
One of the limiting factors I find that separates the 2 shares is the lack of daily volume in NMT.
It is the main obstacle to the share that it does not present the kind of liquidity to interest larger investors.
It is lucky that NMT is rarely shorted as it would be easy to manipulate. Galaxy endures 10 times more shorts and that is the main reason to the 2 share prices are close right now.
Not from volume or share number, but outright manipulation.
Before Galaxy was shorted we were climbing into a different league 10c clear of NMT and will most likely do so again.
When I first invested in GXY - NMT was the media darling and much more expensive. Same with PLS.
I studied the comparative strengths and plans of both companies until forming a view that I would be better off to invest in Galaxy, despite it being the underdog - and probably
because it was the underdog...
the gains have been off the charts.
No question that for my own circumstances - it has already been the most profitable decision for me already.
I’m in for the long-term so I want to be able to park it and wander off.
Right now I’m here a lot to share a bit of research.
I can see a period when this sector has matured that it won’t need to be fighting for it’s survival against misinformation and will have reached a good level of maturity and “steady state” investing.
I’ll go off and play my ukulele by the lake all day, leave the sp ticking north and leave you guys to it.
As we have seen already a few months can make a huge difference to the fortunes of one company or the other.
It is important to be on the right train when it gets momentum and is free to reach its potential.
A lot of the second wave explorers have had their sp crushed and don’t look like resurrecting quickly.
The gains of the first quarter may be about to repeat in the lithium sector as the world wakes up and it looks that this time they will be all about the real producers. Because now - there are real producers.
Mt Marion is one too.
I wish NMT all the best but I’m personally not as interested in the company’s forward strategy.
I’m not the only one. Other analysts of pure play lithium don’t rate it either.
Matt Bohlsen for one. Joe Lowry makes reference but largely now refers to it as Ganfeng’s operation.
If NMT can collect some rent that is fine.
I see the processor sector move being the one that is risky - not the mining and production.
In the end its not about share price. It’s about Market Cap. Galaxy is already more than 3 times higher.
At 55c Galaxy becomes a billion dollar company.
Sure it may be financially strategic to consolidate to remove volatility but the Market Cap is the main thing.
Market Cap has placed Galaxy in the ASX200. NMT are not that likely to get in for a good while. NMT’s share price would need to be well north of a dollar.
Galaxy shipments are backed up by Mitsubishi guarantees. This makes it easier for Galaxy, already with the kind of market cap that makes banks take notice to present a strong case for financing - rather than equity sales or dilution. So many more options for larger companies to make headway faster when there is profit and management that can take the bull by the horns.
Those doing deals with the Chinese now from Australia will have to be careful.
They may get the deposit and the mine
but
they may not have a company like Mitsubishi behind them to pursue the cheques and enforce the contracts.
Anthony Tse lives in Hong Kong. He may be the victim of a bit of bashing now with the shipment delay - but I think you’ll find it hard to improve upon having that kind of familiarity he has with Chinese business
and the experience he already has within the lithium world.
I imagine you will want to to-and-fro for a while but let’s just leave it here, eh?
I’m not expecting these views to be popular with NMT holders but I'm entitled to have them and express them. This is the Galaxy forum. If you want to chat about NMT and inform me about where I'm still a doofus I'll come over there and discuss. OK?
I’m all for peace and harmony in the lithium sector but I’m not invested heavily here without doing my research on the sector and being able to back it up.
