"maybe spend a bit on an independent financial review with a big accounting form."
Seriously? They will just say that when the SP was over $1, Spod prices were over USD1,000 and the hype deafening.
Then they will say, Spod prices have halved and there is oversupply with producers going into C&M, resulting in PLS having a limited market to sell. Whereas (when the SP was over $1), the expected EBIT was massive, now we struggle to even make a profit.
Then they'll say, give me my $10m consulting fee!
This was never going to be a case of build the plant, flick the switch and everything will work perfectly. Greenbushes had years of experience and several years ago publicly stated the difficulty in starting hard rock production. PLS are still configuring their process.
You hope for the best and prepare for the worst. Whingers have themselves to blame. Management asked them for money at the CRs of 35c and 30c. They didn't ask anyone to invest at $1.
Converter capacity and EV battery production is set to explode in 2020. There will still be considerable slack to take up in Spod supply. There is blood in the streets now but that's usually when its a good time to invest.
This has always been a high risk investment. The threats posed have come from developing technology. Lithium has beat off all comers. The recent Mines and Money conference highlighted converter demands for higher quality raw material. Our future threat comes from new technology in Lithium extraction, if at all. There's plenty of Lithium in the world. Who can produce it at the lowest cost wins.
Ganfeng (the Gold standard in Converters) are in the sweet spot now. Abundance of raw material and product demand delivering them greater margins. AJM sit on a razors edge and need to sell at any price. Ganfeng is still taking our product, however slowly ... but demanding our quality improve, which recent modifications have gone a long way to achieving.
PLS Price at posting:
26.0¢ Sentiment: Buy Disclosure: Held
(20min delay)