If as the CEO maintains that the unit value ranges from $1 (ex mine) $5 (ex carbonate plant & $500(ex battery factory) then he should have built the battery factory first (the highest value adder) buy-in the battery factory feed and then finance the mine and the carbonate factory from the high battery factory profits to secure supply.
Instead he has economically put the cart before the horse and used investors funds to build the mine first ( the least profitable)then use more investors' funds to build the carbonate plant (the second less profitable unit) and then defer all that profit for two years until the battery factory is built.
What if the carbonate plant is not profitable due to supply/price pressure from South America? We know already that GXY's projected cost of Li-Carbonate is going to be around $4500/ton while that from South America is about half that.The offtake agreements do not specify price as per the Hong Kong listing documents.
While the successful completion of the carbonate plant and test run may see shares go up above $1 on sentiment, the earnings per share is going to ultimately determine GXY's share price and not a battery factory which is at least 2 years away. Cheers Moorookamick
PS: If Li battery factories are that profitable then there is a good chance that some existing battery factory will buy out GXY to secure battery factory feed!....MM
GXY Price at posting:
29.8¢ Sentiment: None Disclosure: Not Held
