Yes fully agree Mr Munky. For what it is worth let me add my 2 cents worth on this announcement:
1/ Well the shorters got it right it seems, and were relying on a cost blow out to shake the SP just like PLS experienced prior to Xmas. I guess it wasn't that hard to predict that a cost blow out was on the cards. Maybe they got wind from some suppliers or whatever or maybe they just put 2 and 2 together. We will never know. It happens, but I like the fact that it is now out in the open. What will the shorters do now is the question?
2/ Many shorters may have covered on Friday using the third Friday in the month re-balance volume to cover easily, perhaps others will wait longer to see if the SP can be pushed down more. IMO the only two factors that could keep the SP down with certainty are a tanking of the spod price or funding to cover the blow out not eventuating, however both are extremely unlikely.
3/ I see the on market purchase of 1M shares by Tim Goyder on the SAME DAY as the announcement and the release of that info during trading as a clear sign that there will be no CR and that funding will not be a problem. I saw it as a buy signal and I may buy more myself even though I am very long.
4/ I am pleased that this cost blow out info is out there and that we know that DSO bonus income is a strong possibility. Also we know that there will be a production increase from 2.5mt to 3mt which will have a huge positive financial implication for LTR. We also have been told that the production schedule is still on track and has not changed. So this is actually very good news for not only LTR holders but also for existing off take customers, prospective customers and potential JV partners for a hydroxide plant and even for potential suitors. The only negative is a cost blow out but that is easily covered by the DSO bonus income and the production increase. I have no doubt, and neither appears does Tim Goyder, that additional funding for this from existing customers, new customers, lenders or Gov Funding will be sourced.
5/ The recent PLS Quarterly has shown shorters what pain they are in for if they hang around, and shows what a money printing machine a good lithium tier 1 lithium miner will be.
So overall I am very pleased with this announcement, it has only positives for me other than the cost blow out which was not unexpected. The shorters were presumably relying on this to justify their short position, but now they will have to decide, unless they have covered already, whether they can justify staying short. There are plenty of reasons why they will not want to stay short as explained above. For the shorter to assume that the price of Spod will tank or that LTR cannot secure $200M would be foolish in the extreme. I see the only reason for them to stay short is the uncertainty as to WHEN that funding will be secured, but no doubt if it is secured sooner it will be revealed and they could be caught out anytime. Customers or prospective customers will be lining up to provide funding IMO. Lenders will also be comfortable given the improved LTR metrics as a result of this announcement. The recent PLS quarter performance only adds to the reasons why continuing to short LTR would not be smart. Add to this that news could still come any time on a Buldania resource increase, a JV partner on a hydroxide plant or even a take over offer.
The bottom line I believe is that the LTR short play has passed and they will soon cover, if they haven't already, and the short squeeze that @anatol has posted on is still on for those shorters hanging around. This is a buy signal to me and it will be interesting to see how the SP reacts over the next few weeks. I noted that @FlashPoint thought that perhaps $1.375 is a bottom of his current wave from a TA perspective. While I usually don't give a hoot (pun intended) about short term price movements it will be very interesting to watch the price over the next month. Longer term I see this as an important watershed moment for LTR coming up to production as other than this cost blow out, it is only good news from here.
LTR Price at posting:
$1.38 Sentiment: Buy Disclosure: Held
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