Good News & Bad News, page-150

Hi @kchil I see 2 things happening at the same time.

1 We have a very valuable long term asset in the Pilgangoora resource, worth multiples of current Market Cap.

2 We have a short term (over the next couple of years) business cashflow squeeze.

The market and most people concentrate on point 2, pointing to current conditions as if they will be going on forever. Benchmark Minerals has been trying to tell everyone they can about the longer term need for vastly greater quantities of all battery minerals, as the world has to go EV over the next 10-20 years.

Forward thinking strategists and obviously companies like WES are looking at the long term opportunities, likewise for ALB and SQM that are prepared to invest large sums for the future (probably add Rio if rumours are to be believed).

The market, especially shorters and whoever is looking to grab a bargain here, wants everyone to concentrate on the shorter term, with likely problems to cashflow for a host of small lithium companies. We are in the category of 'small' in terms of company capital, and without a large partner, plus will not be in the really cheap cost producer class until after ramping up stage 2 production.

In 10 years time our mine operation and whatever downstream associated businesses will be highly profitable, with today's share price looking ridiculously cheap IMHO, but we have to get over the short term hump to get there.

I agree that we are at our most vulnerable over the next couple of years. I also think that KB has done his absolute best in getting a variety of large investors put equity into the company, to the point that some would not like others from gaining full ownership. Also the role and ability of the retail holders is now a lot less than it was 3 years ago. I once 'knew' and could rely on about 6 or 7 of the top 20 shareholders, that is no longer the case.

At some point the market cap of the company will be way too low for the asset (possibly already there), but all the news in the media etc will be concentrating on cashflow and debt, making the company ripe for a T/O. I'd be surprised if some have not already run the ruler over us.

Without a deal of the type KB has been in discussions over, I think we will continue to drift in price, and I'm not expecting any help from spodumene pricing for several years at least. The numbers on that are pretty clear.
However a good deal with POS.....sorry, 'whoever' will probably save us from any T/O but SP could still remain lowish for a few years until we do get the next boom in prices.

Those of us that were in early as in 4 or more years ago, are all going to do well no matter what happens IMHO.
Should the whole sector continue to suffer (I think it will just based on the numbers) without any 'deal' and our SP drops into the 30's, then my plan is to buy as much as possible as it is just too cheap for the resource.

Even with a deal, say 50% of the mine for $1.5b like MIN's deal, I still think the other party is getting a bargain, but for current shareholders that is going to be a lot better than the probable alternative of a cheap T/O.

I know holders all want to be bullish and look for reasons why the SP will go up in multiples from the current position, but sometimes we just have to be realistic with what is happening around us.