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8.2¢ alita resources limited

With Burwill out of carbonate and GXY desire to go downstream,...

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kropka

1,722 Posts.

408

26/08/19

13:46

Post #: 40153423
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Originally posted by unicrumba ↑

The whole sector is currently in a recalibration mode where supply /processing/demand is a bit out of alignment and is to be expected when considering the enormous scale and demand on certain raw materials this type of global transition, which currently is still right at the bottom of a very steep hill, will have...using available data which shows the number of new EV's + The number of new LiB storage/Grid projects approved/ to be approved around the globe + all the LiB Giga Factories coming online next year (just look at the tesla factory that is being built in China, amazing progress) = there will be plenty of demand for battery minerals, Li being one of them.

Getting the timing right is a bit tricky, that's where A40's low debt comes in handy and will give us room to come out the other side and producers with very high debt will not have that same luxury, unfortunately.

Low debt is the absolute key, everything else we have going in favour towards our side and not reflected in our SP which by the way is beaten this low thanks to Burwills quick dumping on the market, current negotiators will be very well aware of this.

Not priced into SP

* Hydroxide JV ** with now large financial upfront costs!
* Resource upgrade ** all other producers have this already priced in
* Best recovery % when compared to peers
* Best quality concentrate to peers
* Only producer left with scope to take on 1-2 new off-takers
* Very high probability that those offtakers will be Non-China, they will have to commit as time&options are running out
* once fines are commissioned this will make A40 a very profitable business leading right into the expected supply/demand crunch which can't be far off.
* Current negotiators will be aware of all the above and will also be aware of the potential upside the next 5-10 years will present.

To me, there are still more positives than negatives that A40 presents and we will come out of this with a clear direction, negotiators know this is a golden opportunity to get set and take a stake in a quality Li producer...GXY and Jiangtee are no amateurs, they acknowledged that the concentrate coming out of BH is worth investing in, as acknowledged by many GXY holders...they are saying that their management is very astute and knowledgable, and they thought getting shares at 0.20c was a very good deal,,, I thought so tooo...better days are not too far off.

All IMO

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With Burwill out of carbonate and GXY desire to go downstream, who nows but there maybe some discussions going between GXY and Jiangtee about future of A40.

GXY is cashed up for any good proposal and both are major shareholders in A40.
In current climate may as well be more beneficial to chase A40 and have carbonate and hydroxide involvement than investing precious cash into unknown Argentina.

Should any TO price cover Burwill's debt, our new shareholder may be just happy to get their money back and vote for it.

In today's lithium sentiment some may consider TO and Tribeca debt payment too much for them but these guys have much longer outlook than many of us, nervous retail holders.

A40 Price at posting: 8.2¢ Sentiment: None Disclosure: Held
4 Upvote

0 Great analysis

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