Very basic back of envelope calcs for 2017 projections:
GXY 2017 - (60000t spodumene x 600$/T) = $36M revenue at Mkt cap $214M
Pros: offtake deals in place for product as above (i.e 50% of $120kT 2017), money rolling in this year, lower risk geopolitically in aust than argentina, looking to expand into brine in sth america going forward, good revenue to fund future brine plant aspirations,
Cons: risk getting brine plant in sth america up and running/ serious money burn, hard rock is higher opex than brine, i don't know the spodumene cost / T FOB (GXY unknown profit margin)
ORE 2017 - (17500t LiCO3 x $6500/T) x 0.65 = $74M revenue at Mkt cap ~$500M (ORE own 65% of project)
Pros: Brine operation well on way to achieving name plate production (17.5kT/y) by Sept 2016, claim lowest opex / T in industry (~$2000/T i.e $4500 /T profit and huge potential incr with LiCO3 cost incr.), has strong local govt backing and on board, has Toyota on board, refined product sale straight to battery market, potential output scale up x 2 in near future, management has form of getting stuff done.
Cons: argentina geopolitical risk, trouble getting the plant running optimally and bottlenecking, questions over concentrations being achieved
Very crude summary but would be happy for others to add or correct.
IMHO both have risks and huge potential upside.....both worth holding, i do.
Depends on you risk appetite as to the other juniors about which i dont hold.
GXY Price at posting:
21.0¢ Sentiment: Buy Disclosure: Held
