Wow you certainly have returned! Ok, we get it, you need the SP to come down a bit. It will do that in the very short term regardless of your rewriting of what is happening so you can take it easy for a bit. It will then recover a bit, cuz, you know Santa, and into the new year when the spod prices lift it will go up some more. So we both know there is at best 6 months more opportunity but its probably stuck in a range +/- 20c from here for a bit.
To clarify for the newbies that aren't across the issues yet and think ASB seems to know what he is talking about:
- The SDV plan is to build in stages and go to market earlier than if they built to the end point in one hit. The first stage is concentrated Li2C03 which is around 96% but importantly free of Magnesium (Mg) and other stuff that is expensive to remove later. The next stage is to purify it up to Battery Grade (circa 99%). This is normally done in two separate plants - one stage feeds the next. The highest margin happens when you do both stages and then sell, or even do the next stage which is to take it to Lithium Hydroxide.
The first SDV stage is to produce Li chemicals (Lithium Carbonate) that are ready for purification to battery grade. If you sell this product it sells for about 25% less than if you took it all the way to battery grade. Once the first stage plant is up and running, GXY will use the funding from the first stage sales to help fund the second stage plant. Not all brine can produce the battery grade precursor - most is good only for technical grade use (eg it has too much Mg or other impurities in it) , but SDV will be producing the battery grade precursor. It is not low grade, it is just not fully purified - only concentrated, nor is the plan any different from what most of us were predicting - that is what we were all saying when we proposed that the SDV development would be "modular". GXY is operating pretty much as planned except some of us hoped for direct extraction that would have had a production cycle of hours rather than 6-9 months. It is, however, much faster the incumbent competitors. so an improvement regardless.
$160m is NOT the official estimate, it is Cannacord's guess and we have informed guess's here of as low as 120m, plus we do not know how much of that has already been spent. Selling a minority stake may mean a 10% local Argentinian partner - perhaps even the Government - for maybe 40m which would provide plenty of buffer and have the advantage of securing local political protection - something I identified as desirable a couple of years ago on these very forums. The "40 suitors" not paying enough is a misrepresentation of what was happening in the original JV search. A much larger stake (percentage of the pie) was on the table then than now, and during the evaluation the new techs suddenly became realistic options so the whole thing was stopped so they could look at the techs. As it was the "new tech" adopted was an internally developed improvement on the traditional tech rather than a radical high-capex alternative. Now they are interested in only much smaller minority partnership so SDV retains more of the profits from the project and are no longer in need of the technical input they desired before.
On the massive oversupply of lithium bit, it is an oversupply of Spod and technical Lithium Carbonate, not battery grade Carbonate & Hydroxide and not outside China. Non-Chinese (Korea and Japan) Lithium Hydroxide prices are not falling as numerous reports have shown, and as the market for the next 6 months is going to be all about Europe that trend will continue for a while - long enough for China to recover after the US-China trade deal is signed.
Anyway, glad to have you back. You keep doing your thing and we'll keep correcting your FUD and watching what you say for an indication of what the shorters are planning. Normally you spout a price target. Kind of curious that you haven't yet this time round. Is the strong buy wall your team buying against their own/other shorts or is there someone else interfering in your shorting?
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