And that's what I want to hear, more people sharing, expressing the idea about who potential partners will be. I also think that understanding the history of currently producing assets, will show just how tight supply will be. The challenges are much more significant than one anticipate, especially for lithium. It's more challenging producing lithium especially from brine, and often times, most new projects have to undergo massive delays to correct these problems (both major and current junior producers including GXY), and often time have higher costs than initially expected. So IMO, I think it requires slightly different metrics compared to the production of copper and cobalt, since those tend to be more predictable to scale up.
As a result tighter supply, while demand is growing (especially after the Paris Accord Agreement, and esp. in China)
As a result, we have seen the price of lithium carbonate/hydroxide continuously move up as the battery makers are dying to get their hands on the product, so they can provide the batteries to supply carmakers, and allow them to scale up and mass produce their vehicles.
As China seeks to ban ICE vehicles within next 10-20 years, markets are starting to understand that the EV market is no longer just a niche market. This disruption is just starting, and as we saw in other sectors (ie computers, cell phones, etc), it's really hard to understand just how massive these disruptions can be. People are always sceptical, until they actually see it with their own eyes, or have their own experiences. It's the natural human tendency.
So as this massive disruption begins to fully realised, I think we start to realise that GXY's valuation of ~1 billion is just a start, especially as they are getting ready to develop SDV and JB.
Maybe in the short-term, it will be shorted so that people can buy low and maximise returns, however, in the long-term ( at least for the next 3-5 years), the prices should remain fairly high, justifying higher valuations. And as a result, I think that current lithium stocks that are being seen as 'overvalued' will be adjusting their valuations once the scale is considered. This, for GXY, should continue in mid-oct, when the Q3 quarterly is released (showing the profitability of our 2017 shipments), and when the SDV strategic partners are confirmed.
And based what management's actions it seems as though VW, Mercedes, and Tesla make the most sense. I could be wrong, for sure, and @Thesi has shared her opinions, as well, as have other posters. And I hope more people will speculate and share their thinking as well based on information they have or have heard.
GXY Price at posting:
$2.63 Sentiment: None Disclosure: Held
