Logically are you against this DFS life cycle of due process in the aspiration of an explorer or specifically in PLS case
It's not PLS specific. PLS has as good a chance, if not a better chance than most of its peers, as its an early mover. My problem is I find all these companies uninvestable due to the closed, secretive and small commodity market they operate within. It's impossible to predict prices over the lives of these mines. When you design a pit and do the economic modelling you need to be confident in your sales price assumptions over the life and scale of the pit. Take iron ore. Prior to the recent iron ore price increases associated with the China boom you could design a long life big old iron ore pit here in WA based on long term prices for iron ore of about $20-30/t and contracts with customers in Japan and Korea where long term demand for steel was obviously not going away in these developed economies. The investments in long life big iron ore pits were justified by knowing the long term demand was there and that the long term price was going to be stable, it had been stable for decades. These ridiculous investments in long life lithium mines and the valuations the markets give them are based on initial short term supply constraints which will work their way out once batteries get cheaper and supply expands. Once this happens the down stream cartels will offset falling LCE prices with rising volumes of sales and the hard rock miners will get squeezed from both sides as their off take agreements are tied to the LCE price and the they will also suffer expanding supply side worries as more producers come on stream, desperate and late to the party. Esh
PLS Price at posting:
80.5¢ Sentiment: None Disclosure: Not Held
(20min delay)