Haven’t logged in for a while as I just got a bit tired of this site
and then we really took off and I got really really lazy.
I kept thinking along these lines -
This is now an insto-dominated stock. They’re ready to let it run, just as I thought they would.
Why bother typing up pages of fundamentals for them?
The positive push behind this company is not difficult for anyone to see now and they know all this stuff already - and that's why the price is going up.
Retail is either smart and hold and ride shotgun with them — or they’re not, and sell cheap.
That is as simple as it is, and plain as the daylight hitting the solar panels on your roof.
i.e. No point in wasting my (or your) time with posting much any more..
But, today a friend called and said there were some people asking me very nicely to say hi again on HC
and would I please stop being so rude and get off my banana lounge,
change out of that loud Hawaiian shirt (thanks Deano), put on some pants and just do a bit of Proof of Life.
In my defence, it hasn’t all been mooching around AirConditionerLand.
I’ve also had the interesting pleasure of making a bunch of new contacts higher up the financial food chain
and, of course, I’ve been taking every opportunity I've had to talk GXY up and learn a few things in the process about what others are thinking about Lithium’s second wave.
So far so good. Seems we’re flavour of the month/year/century and I really can’t find anything but praise for the quality of this company and its management team.
I’m really pleased with the performance of my precious GXY shares over the last month or so.
I’m glad for all the holders and the old timers Bron, Upstart, Thesi, Deano, M92, Jehosephat, Sachz, Bobsacramento, astroboy, Ninja Tuna, Cadel, Pine 10
and dozens of other great posters that grace these boards with their humour, sector research and steadfast determination
to hang onto what they have for the long haul.
I just thought I would step away from HC for a while.
I lost interest in the discussion topics.
As much as I’m happy to be a LT with a disciplined agenda of constant buying - this place really bugs me sometimes.
I’m here for another multiple of this share price on the back of SDV and JB development
and I have no problem topping up at these, and the higher prices to come.
Simple patience and consistency is always my weapon of choice with good fundamental stocks.
I just don’t share the perspective of a nervous/paranoid day/swing trader and I’m comfortable doing my own research to back the rationale for my own very decently sized LT position here.
I don’t mind contrary opinions and the odd chart, but time is precious and I’m not willing to debate fundamentals all day long with people that have the simple agenda of pushing their own stock.
I’m glad that there are other people willing to pick apart the inaccuracies - for the sake of newer holders who may not have read enough fundamental material yet, but cross promo and malicious intent is the name of the HC game.
I see the HC down-ramping/cross promo cottage industry as a pointless exercise when the stock is no longer really significantly held by retail.
We could all sell out in a little over a week of average volume and the instos would burp, say thanks and then double the price.
Down-ramping on HC only works when the owners of a stock are predominantly nervous retail.
This stock is now held by instos and under the complete control of the quants and finance men.
The price is now this high because it is in the process of being rapidly re-rated by the quants, not because ma & pa investors have got in a sudden tizz.
If anything, there are now even fewer of us than even a month ago.
There may be other choices to ride the lithium boom, but I am not convinced that there are any that are in a better position, or with the same level of certainty of success. That is the way it is being seen by the instos too.
And that perfectly form-fits my newly devised Banana Lounge Stock Investment Strategy.
Galaxy has proven itself well and truly this year.
The next booked shipment of 15.1kt, after only 3 weeks from the last at 14kt,
indicates that Mt Cattlin has been operating at an impressive 5kt per week of finished product.
Thats a 260ktpa equivalent run rate right there. Stratospherically higher than the 160ktpa run rate
that we were told to expect being achieved this year.
If you’re looking for a reason for the strong rebound - its right there - coming off the conveyors at about 30 tons per hour.
I think I predicted at the start of the year that we’d see this come up as a monthly shipping figure
but I never expected that it could be done in 3 weeks.
Its absolute vindication of Galaxy’s approach to letting the numbers speak for themselves
and a major victory for the plant operators and its management.
Please take a bow AT, AB, Pensabene and co. You’re doing a stirling job for us all.
According to the pit boss we have even better recovery rates to look forward to over the next quarter
as they implement new crushers and circuits, whilst also further lowering opex.
Other companies are promising larger plants but Galaxy already has one that will take the others long years to match these figures,
as a smooth-running cash machine, well positioned now to inject vital cash into progress at its other projects which will then subsequently play their own part in keeping Galaxy well ahead of the competition in the years ahead.
Mt Cattlin already has 7 nearby tenements of lithium in reserve and neighbours willing to drill for more supply that should see it defy every single down-ramper that bypassed investment here.
That was the biggest mistake many lithium investors made over the last period, deeming Galaxy as being Too Obvious.
So, instead, plenty of people that should have known better, spread their bets around a set of newly minted companies
that haven’t made an inch of actual progress in the last 2 years.
It may have been a case that they could wait and see for a while as all lithium investments seemingly languished - but now that the front runners have put on such a clip, many must be kicking themselves to have missed the obvious lithium investment
and taken a good position here when prices were so cheap.
Be very careful out there. The next 6-12 months will see a good number of lithium spec companies culled from the ASX.
The market is losing patience with inexperienced management teams and poorly executed PFS reports, unachievable capex, whizzbang-you-beaut alternative processes, bad locations or uneconomical drill results - and just plain old too-late-to-the-party-carpet-baggers that are doing nothing of interest with share-holders' funds.
Hype obviously still works its special greedy magic in MicroCap Land, but patience is thinner on the ground as the next period will see more and more lithium investment money flowing towards the established companies that now have much lesser chance of larger drops. There simply isn’t the fundamental argument behind confidence being lost in the prospects of those with a foothold in production any more.
They will make very good money for a good while yet. It may take 10 years for the world’s production to stabilise against demand.
Yes, Dorothy, Galaxy can multi-bag too.
Lithium is white and hot again
and Galaxy was always going to come roaring back on the back of such consistent production
and the unquenchable thirst of Big Auto 2.0.
The quants have now digested what was obvious to any detailed study of the last GXY financial reports.
I’m pleased if anything I have ever written here has helped people hang on through some of the darkest days of the Big Dip.
If you managed to accumulate, as I did reasonably substantially, then congrats too.
We are now back to where we should have been 6 months ago and as much as you may be tempted by your gains,
Q4 will be Galaxy’s quarter to shine and put on a bit more muscle on the share price.
The next published quarterly will show a massive corner has been turned with 3 shipments at new contract price
and there are already the signs that December quarter will again see another profit upgrade with bigger shipments.
James Bay’s drilling assures us we have a massive resource upgrade and a huge DFS to look forward to very soon.
The grades look to be well above the Australian deposits and the asset brings new meaning to “at surface”.
Geologically, its an exposed hill of spodumene that runs as deep as the drills can go and can be carted away from the highway running straight up its guts.
Sal de Vida’s offtake partner will emerge soon from the front tier of global companies. You’d be a braver man than me to set an upper limit on where this company’s sp is going, cashed up for the beginning of the real lithium super cycle - the one which finally has the resurgent share prices AND the proven economics of the slow onset of new production and a steadily rising lithium price to back it up, each step of the way.
I’m not playing any what-ifs any more.
Chris Berry always said that Galaxy’s strength was in its “optionality”.
We know the phones have been ringing hot at Galaxy HQ and I’ll leave it up to AT to decide which course of action is the best.
Big Auto has said there are 10 lithium companies that they trust for supply.
You can bet that this opinion is fairly well supported in the battery sector too.
Galaxy is in that top ten group - already positioned at number 6 in terms of profitability and being the largest pure play
and has the upper hand in negotiations, already in a comfortable financial position and virtually the only one that hasn’t locked away its future supply to a specific buyer.
It’s worth remembering that Mitsubishi is actually a contracted employee as sales agent with regards to Mt Cattlin supply.
This contract can be cancelled at any point by Galaxy but it obviously has been a massive advantage to have them
taking care of the shipping and payments. That may well change down the track, when their logistical assistance is no longer required, or a new long term client emerges to handle this side of the business. This means Galaxy always has the options to redirect this supply as a sweetener to any deals done for SDV and JB, meaning that the client can be assured of immediate supply as well as being the recipient of ever-increasing production at the new assets.
It doesn’t really matter who signs the SDV offtake.
Only the terms.
The terms must be to the clear benefit of all share holders or SDV can simply be progressed slightly slower by the company all by itself
and that way the company (and us) retain the full measure of ownership.
The management team are home grown Argentinian brine managers and engineers who know these salars like the smell of their wife’s hair.
Dr Mehta, leading the team, is probably the world’s most respected brine scientist. They have plans to fit every level of production from test plant, to mini-SDV, 25ktpa SDV or even the giant 50ktpa that AT started talking up at the beginning of the year.
Remember also that we are about to enter into a share price zone that management will be very keen to hold or exceed for a good period to attain their performance options. It is in nobody’s interests (particularly management’s) that any future deals revolve around dilution. There are too many other options on the table for billion dollar market cap companies. Galaxy has some top tier banks/funds on its registry and BNP already extending a line of credit.
Besides, we already know the rough outline of the SDV plan from the Digger and Dealers conference.
Offtake pre-payment is the way forward.
That was management firing off a starter gun for any last minute bids and I’m sure there have been plenty.
We’ll see soon enough.
Behind the current share price is an army of traders who have sold too soon
and shorters keen to balance the wreckage of their books.
I don't fear or predict any major or prolonged retrace at this stage - I’d actually welcome any buying opportunity I get
but there is simply too much coming up on the near horizon for this company
and the best part is that the new momentum is revealing the market has virtually boundless enthusiasm for lithium producers.
I’m sure plenty here have been posting the weekly news of increasing pressure on the ICE industry
as we all move much faster towards the first EVs in our own lives.
There are very large hands ready to catch any sp weakness. I have friends who have sold and bought back 50c higher already now that they can see the strength of the legs behind the pressure wave.
That's the thing about a bull market. Even an idiot can make money when its going up all the time.
Its just that you make quite a bit more money buying from bears when the market has lost its mind.
The recent AFR Panasonic rumour that hit the press proves that there are some very well-connected people now fighting our corner
and its nice to see a bit of media manipulation swing the other way for once. Keeps us all on our toes for the real announcements to come.
It also gives you some insight into how ready the market is to buy in large with the slightest hint of deal confirmation.
I didn’t believe that particular rumour for a second - “signed 2 weeks ago?? .. yeah right...” - but it does give you an idea of how large the correction north will be when the real news breaks.
Safe to say that its likely to add another dollar to our share price much faster than the last.
Regardless of the date of the offtake announcement, the announced plan in August was for the ponds to begin construction in Q4. Now that the drilling campaign is over at JB, Mt Cattlin can switch over to supplying more than enough funds for the first 45 hectares of ponds that they’re planning.
It will be a beautiful thing to start seeing those ponds starting to stretch out across the valley.
Galaxy finally knows how to run a good Twitter account and those SDV construction photos will ring the ASX cash registers like sweet music.
On the larger scale fundamentals front its also a good idea to watch out for some key external events.
One is coming up in a few weeks and very important to our future in SDV.
That is the Argentine mid-term congressional elections on the 25th October.
Macri will gain some more seats and increased senate majority as the opposition has splintered into rival Peronist camps.
I say “will” because it is virtually assured, as there are far fewer govt seats up for grabs, and there has been a strong change in the polls in the urban areas that were more left-leaning before.
The Argentine stock market has gone ballistic in anticipation of further pro-business financial reforms.
This is important to SDV finance and offtake as Macri has been the key driver of a long list of reforms that have benefitted international investment in mining projects. Taxes, import duties, removal of a specific lithium tax and grandfathering the taxation schemes in place when a project commences are the most important cost-saving features of his administration that directly impact SDV’s future fortunes. Macri has already succeeded in pumping up confidence in the prospects of Argentine mining operations and there is promise of further improvements, less protectionism, improved infrastructure in the lithium triangle zones and more cutting of red tape.
My take is that Big Money is very keen to see Macri further cement his political power and give another good push to the ascendant lithium industry.
My prediction is that the SDV deal will follow hard on the heels of the election results as the final piece in the due diligence puzzle for our new partners.
The rest of SA is a bit of a mess. Chile is a difficult proposition. AT told me that Argentina reminded him of pre-boom China. They know that lithium is a going to play a very important part in their economy and they are willing to make it easier and easier for companies like Galaxy to prosper, and bring much-needed employment to some of the most backward and poorest regions of the country. (avg income $5kUSD/year. avg experienced mining wage $15kUSD/year).
The other thing to watch is the tighter Chinese capital investment outflow restrictions. I believe we’ve already seen this begin to bite at least a couple of micro-caps this year that were expecting promised payments - leaving them to credit raise, rather than get a cheque.
Chinese MOUs have proven themselves elusive to translate to cash even for the bigger players.
Some companies betting on China to save their bacon may get disappointed when they fail to pass muster at the final hurdle with the Chinese govt.
This is one of the other reasons why I see a culling of the lithium micro-caps. When capex is larger than your market cap - that is a problem. When the Chinese govt starts refusing risky bets on small companies that is another.
We’ll see how this plays out. My take is that every further disappointment in the progress of spec lithium is good for GXY. Even the recent over-egging of some of the next wave of producers shows how much headroom and potential there is in this next period.
I believe Galaxy’s future lies in moving beyond exclusively supplying Chinese clients, and becoming a global company in the truest sense - with international operations AND international supply contracts. And, sadly or not, largely foreign owned.
That bit has already happened. Galaxy is now basically owned by US and European funds.
While oz retail wept over the results of a season of price manipulation, the rest of the world’s instos stocked the fridge and took ownership of the registry - and they’ll be the ones who’ll be taking the spoils of their sensibly timed investments in the years ahead.
Galaxy is in an important position to help balance the lithium supply so that China does not entirely succeed in dominating the next period as we move beyond oil. I think thats what makes this company even more appealing to me - that we will have an important role in making sure that lithium stays healthily competitive and global.
If China wins, then it will be BYD that takes over from VW as the world’s largest auto company within 10 years and it will be the Chinese govt that sets the global lithium and battery price for the next century.
That really can’t be allowed to happen. Dealing only with China is another variation of sovereign threat. Their industry is another arm of their government and they can change the rules of the game very quickly.
We need strong producers capable of building up the US, Japanese/Korean and European battery production so they're capable of standing alone with their own complete supply chains from mine/brine to vehicle/grid battery.
Ok. I think that’s about all I got in mind right now.
I have an absolutely lousy internet connection at the moment
but I promise to contribute a bit more whenever I have something I think is worth reading.
Thanks for the kind words from many members of the forum.
All the best
AC
GXY Price at posting:
$3.11 Sentiment: Buy Disclosure: Held
