Its Over

Originally posted by 1ronnie ↑

Another very bad day for Blue Sky (BLA) sp falling 20% and hit another low of $4.03- another reason why people should avoid 'tainted stocks' at all cost. As they say if there's smoke there's likely to be fire. Now BLA has downgraded Asset Under Management (AUM) and NPAT guidance (by some 40%).

While a stock which had been suspended is not necessarily proven to be 'guilty', its very suspension suggest its corporate governance is suboptimal either via misleading disclosure to prop/spruik sp or non disclosure or poor transparency, take your pick. Which means you cannot place trust on management of such companies. Management of such companies are popular amongst HC forum communities because they make frequent announcements designed to prop up sp; such behaviour is rarely observed in companies which already have proven revenue and profit track records where HC forums are rather quiet.

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I have been tracking FYI Resources (FYI) since end of January before Dow began its tantrums , and it is by far the only stock that has actually moved up since then. The reason? Smart money has been pouring into this stock and this holder of FYI in the link below has highlighted it perfectly.
https://hotcopper.com.au/threads/an....4123093/page-3?post_id=32437642#.WtQDq08UmUk

FYI has two businesses- High Purity Alumina (HPA) and Potash project in Laos but it is the former that would be subject of focus in this analysis. FYI has its 99.99% high purity alumina (HPA) project at Cadoux in WA with quality of its kaolin that is suitable for treatment to produce 4N alumina. Its HPA production strategy is at the Preliminary Feasibility Studies (PFS) stage with an objective to be a dominant producer of HPA- this involves a processing facility supporting a treatment capacity of 120,000 ton/year of kaolin ore for feed to a specially designed beneficiation and refining plant for the production of up to 10,000 tons/year of HPA.

So why is HPA important? The demand for HPA is primarily (up to 60%) led by the growth of LED based lighting applications such sapphire crystal screens for Iphone and Apple watch and separators in lithium ion batteries and the electric vehicle (EV) market. The 4N 99.99% purity HPA is by far the largest sector of the HPA market. Global demand for HPA is expected to reach US$4.4B market forecast in 2022 with a 20+% CAGR. 500 million smartphones are sold each year and each phone screen uses approximately 30g of HPA. HPA is not only in high demand but commands a hefty price of about $25,000/ton.

FYI is in the niche 4N HPA market catered to growing huge global markets i.e devices with LED screens and the electric vehicle market [see above]

FYI has achieved 99.99% purity HPA making it amongst the 3 ASX companies to offer it and being the cheapest of the 3

FYI’ strategy is vertically integrated-to own and control its own HPA production chain from high quality feedstock through to processing allowing FYI to meet the increasing quality and assurance demands of the market

Typical HPA IRR% is circa 30% but of course subject to DFS ; FYI’s HPA kaolin processing route has lower capex and opex intensity compared to traditional HPA processing