Li-related News/Articles/Reports, page-7211

If we believe management, then sure, we believe ramp up is going to happen by the end of this quarter (within the next two weeks or so). If I believed them last quarter I'd have had similar expectations, if I believed them six months ago, a year ago..... you get the picture.

Talk is cheap, we obviously can't take AGY at their word, we have to use our own common sense.

The reason I believe the external experts were not successful is that if they had been, we'd have seen results by now. Enough time has gone by that we should have seen something more than a nebulous 'things are progressing towards us being able to ramp up production' announcement, which is the same thing we've continuously heard for all too long They prefaced that attempt at exciting the market by boasting that the 2,000TPA plant had produced a whopping total of 67 tonnes in total to date... which would only be moderately disappointing if we were hoping for the current plant to only produce about half of what the pilot plant was supposed to but never did. You quoted the most optimistic line in that announcement, but note that it doesn't say we are currently at near optimal operational parameters, it says we're advancing towards that point. Now plug that style of wording into AGY's track record of using such language and cross reference with the results we see over the following year or two. AGY is not shy about telling us things are about to happen when there is no actual basis to it (I don't have to remind everyone how many times their timeline guidance has been missed, to the point where you can reliably expect it to be missed), heck, they literally even tell us things have actually been done when in fact they have not! (Offtake deal, the pilot plant did its job, etc). There's a small chance that they have quietly been ramping up on production and will tell us next week. There's a much larger chance that we'll wake up to a trading halt informing us of a CR. I'm well beyond taking AGY promises at face value.

It's possible that there will be a wonderful announcement about production going bananas, and if so, I'll miss a few pips and buy back in, but it seems far more likely that after the next disappointing announcement we'll test the recent lows under 10c and likely make some new ones.

Bottom line, I'm not keen to hold AGY as a long term investment until they demonstrate they are actually capable of production. They haven't done that yet, and they have clearly demonstrated that they're willing to lie about more progress having been made than has been. It's a great trading stock though and I've followed them closely enough for enough years to have an idea of their style and the way the market reacts to it, so I'll go back to trading it which is where I actually had a lot of success with this company, and ironically the biggest risk was in holding it long term.

krw: I'm not sure whether or not you're joking about your recommendation to mortgage assets to buy back into AGY in a big way, but it seems very reckless to say the least. We're literally talking about a company with a proven track record of broken promises, proven lies, and a lack of success. Unless lithium prices skyrocket again (arguably not impossible, but it's entirely speculative), even if they are entirely successful with the current plant (increasingly dubious, especially in any short term timeframe) and get the expansion permit, fair value isn't much higher than that current market cap anyway, and let's not forget that even if production ramp up is successful and the permit does come by the end of next quarter, they're absolutely positively going to have to raise funds to build the new plant. Most likely though, they're going to be trying to raise capital to build the expansion plant before they have even shown they can get their initial plant to work, demonstrating that the pilot plant clearly did not do its job.

In short, while there is some chance of a good return, this is extremely risky, so mortgaging assets to load up would be extremely dangerous. Most likely, even if it does go up, it'll go down first. And hey, if it does go up handsomely without going down first, it'll be on the back of good production, and if you act quickly you shouldn't miss out on too many pips anyway.