Hi
@Jubbo70 I thought this tweet might answer one of your questions.
Hi
@Dancing it's a very good question. The answer would depend if my speculation is right. The ability to be able to produce up around the 26,000 tonnes per annum of lithium hydroxide per my previous post would advantage quite significantly given the location with easy access to North America and Europe. The question I am wondering to answer yours is if Galaxy did merge with Nemaska what would the offer look like?
Last night's trades on GALXF ended at just over AU$2.51 (I didn't check volume) meanwhile Nemaska Lithium completed at AU$1.14 (The Aussie dollar and Canadian dollar are 1:1)
Nemaska appear to have roughly the same amount of shares on the market as Galaxy will post consolidation...But the market caps are quite different. Nemaska indicates a market cap of around $360 million meanwhile Galaxy is up close to $1 billion. It would mean that each Nemaska share might only receive 1 share for every 2 in the new entity which I think works out to be a 20% uplift in value. (Initially I had it down as 0.4 share per share)
It would be about selling the advantages to both holders in Galaxy and those in Nemaska as to why the amalgamation would be of advantage. Particularly those on Nemaska as they would have 50% of the shares they had previously but again a 20% mark up in value. Whilst generally we might see some profit taking I am not sure if many would be willing to give up their shares in the new entity if it comes off.
The presentation I saw by Guy Bourassa indicated a resource size of 20Mt for Nemaska and we know Galaxy have a resource size fairly similar in James Bay also though the DFS is due soon.
We know Galaxy is also drilling out around Ravensthorpe to expand their mine life and also to get a better understanding of what they have in the region.
Anthony Tse mentioned at the AGM that each asset would service its particular region that it sits within but it would be difficult to walk past the company having a massive reserve overall. There is also no reason that Galaxy couldn't divert some spodumene from Mt Cattlin to James Bay... Might cost a little more, but the reward of converting to hydroxide would make those costs a non issue..
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Whilst all this is going on Galaxy would continue with Sal De Vida, wait to strike on FMC's assets and then have a word with Lithium X about expanding Sal De Vida well beyond the 25,000 tonnes that has been considered. Though this would take time..
Should up to the Nemaska alignment take place alone I have asked a few people their thoughts and the general concensus was that the shareprice would take off.
To work it out I am particularly interested in feedback on what kind of offer would be made.. That would be key.
Then identifying exactly how many shares and options would be in each as of this moment.
Having 2 assets in production and a large amount of resource it would significantly boost the street cred of the company.
Based on speculation getting about $3.50 might be a conservative guess which could give a market cap up around $2.5 billion.
Sorry if this isn't the best of responses... I am quite tired from a long day travelling. I think its a very good question and worth debate.
