What is happening in the lithium market at the moment is linked to geopolitical developments at a very high level at the country level.
And The value and importance of LTR's KV project is growing.
China is producing an enormous surplus of goods and the West cannot keep up. Western developed countries didn't care about the general goods but when it comes to EVs they will try to stop China, because China has now reached to a very high level of technological advances in many sectors. Making a high tech EV is just peanuts for them.
Especially developed western countries have now realized that China is going to take over the world car market with EVs. And they immediately woke up and took measures. We see the US at the front but European countries might take the same course as their auto industries can't compete with Chinese EVs.
I just went to car dealers two weeks ago and checked the Renault, Hyundai, Citroen, and BYD EVs. Most of the Europeans EVs are built on the ICE based structure. I was able to see that easily. That strategy won't work. Toyota did the same an then gave up from that strategy. Those type of EVs are not as good as the newly designed on EV based structure like the Chinese EVs. I was able to see that on a BYD Atto 3 EV. Therefore the Chinese EVs are far ahead of many of western EVs as well. That's the reality unfortunately.
China's main goal is to sell vehicles to the world but not to sell lithium or lithium products, not even batteries.
I said that long ago. Their aim was to takeover the vehicle industry in the world. China was a country that exported very few vehicles until this year, but in the first three months of this year it made big sales (especially by BYD). China didn't export a lot of vehicles in 2023 as its local market was sucking all EVs. But with the vehicle export figures in the first three months of this year, it took the first place in the world exports. And the West immediately (US for now) woke up and took measures.
The value and importance of LTR's KV project is growing.
Everyone agrees that it is the best lithium project in the world right now.It has the highest ESG credentials because 60% of the energy will be renewable. In 2030 it will be 100%. The importance of ESG will be more understood in the future.
The US tariffs for Chinese battery and EVs are very high now. This is on top of the IRA (Inflation Reduction Act) of US which gives up to $7500 per EV.
The Chinese EV makers just laughed to IRA measures of the US. They said "we can sell our EVs at such a cheap level that IRA would not be effective". but now it's different; here is IRA measures, on top of it there is very high customs tariffs. Not easy to sell their EVs at cheap price in the US anymore.
The free trade partners of the US, Sth Korean and Japanese battery makers have a big advantage now.
So the US auto OEMs will buy batteries mainly from Sth Korean and Japanese firms. The new very high import tariffs for Chinese battery makers and EV OEMs are now giving big opportunity to Koreans and the Japs.
In Australia only LTR and two others are compliant with IRA rules, but not the Greenbushes and Pilbara Minerals IMO.
That's why the value and importance of LTR's KV project is growing. LTR's offtake partners are all non-Chinese buyers; Tesla, LG and Ford.
The new Australian budget gives 10% tax cut if LTR produce a refined product in Australia.
LTR has already done its lithium hydroxide refinery scoping study 2 years ago, then it establish a partnership with Japanese Sumitomo to produce refined product in Japan or in Australia. LTR is also working on refined product business project atm.
So LTR is in prime position now because of geopolitical issues other than its technical advantages like having a state of the art mine, high quality managemen and high grade ore.
Yes I agree that LTR is now a prime takeover as well. But who will be able to afford it is the question.
I wouldn't happy with $3 takeover over anymore. That was the price for some time ago. Lithium price was low at time but things has changed a lot in global geopolitical level. After those very stressful takeover days we have had a lot stress and took a lot of risk to see these production days. Now we are there. Dry plant commissioning has finished everything worked very well and then the wet plant commissioning started. The wet plant is working very well so far as well. I believe they produced 6.3% spod in the wet plant and the commissioning and fine tuning jobs are continuing.
I don't like to sell my shares at $3 level anymore,
because I am very confident that LTR will have $10b mcap some time in next year, which implies to $4 share price. Just simply compare it with PLS ($12b mcap) and you can see the real value of LTR when it starts producing and make revenue which starts next month.
I'm even happy with $1300/t for 6% spod price (at $1100/t for 5.3%). LTR will generate a lot of cash with that. When it starts generating cash, things will be very different for LTR. And we have only one month to see that.
Why wouldn't I wait another year to make $1 more per share? For example if you have 1m shares it will be make $1m more in one year. That's a lot of money. I wouldn't be able to make $1m in one year with the money which I'd get from the takeover.
I don't care about the takeover anymore.
No other lithium company would be able to afford to buy LTR as the min price would be $7 billion for $3 takeover price. Only the majors would be able to afford buying LTR. BHP is not interested. RIO said the lithium projects were too expensive, etc, etc.. Gina is silent. She might also not interested to buy LTR alone, or maybe couldn't find a interested party.
I'm purely prepared for LTR to start production and generate cash.
I'm not interested to make analysis of those potential buyers anymore as I'm purely prepared for LTR to go for production and generate cash. I believe Tim Goyder is also in the same direction.
I can't wait for Ascendant Video
Adam Smith, the operations manager said they would post a video on May 20 on next Monday.
Adam Smith is the man who built the KV mine and plant. He is the man whom I respect and trust. I never met him but I respect him very much. He worked very hard behind the scenes, he has been very humble along the way, and never missed a beat.
I congratulate him from here.
Good on you Adam. We are lucky to have you on the helm of KV project.
So just hang on there and wait. Tim Goyder is making very good progress at high levels. Gina is silent. We don't know if she is going yo make a move. I don't want to sell any LTR until the new year January February. I can see LTR will reach to $3 easily and climb to $4 next year. It has to have $10b mcap at least which implies to $4 stock price.
I'm waiting patiently as all always.
Feeling very good btw.
Good luck to all holders.
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