While we're all shootin' the fat at whatever time of the...

While we're all shootin' the fat at whatever time of the night/morning, here is my two cent's worth...

Firstly understand I am a 'believer' in the Lithium story and have been in and out of PLS and a bunch of others for a few years. I confess to selling at the high prices a few months ago - as much through luck as anything else because I make a habit of turning over a stock when the profit seems right/fair. I also bought back in on a bunch during the recent fall - sometimes too early and sometimes at the right time, but sometimes a little late - and in the case of ORE not at all (darn it). So don't everyone get upset with me...BUT...

Lithium IS high risk as a commodity investment. Why? Because the main thing driving current demand is EV demand expectation (and maybe home/utility storage expectation), and that is heavily driven by government policy positions around the world. For us, it is China at the moment, for ORE / brine producers it is probably more US based. If world governments suddenly change their minds about the desirability of EV fleets, we are screwed. We may not expect them to do this and we may all be convinced of the sense of going there, but never forget we are, st this point, dependent on government policy positions. As someone who built his wealth consulting to various Oz governments - running large teams of consultants, I can attest to the fickleness of government policy positions, and their incredible susceptibility to lobbying. Things can change overnight and your entire business model be destroyed instantly.

We have not yet reached the level of penetration where there is 'natural' demand - say, like with oil. We are not yet an essential commodity - at least not to the scale of mines under development. In this respect a ten year supply agreement is potentially incredibly important for financing, but while a negative policy change is unlikely to happen, never forget that it can. If all unfolds as we expect there would seem to be a significant shortfall over the next few years at least, but that in itself can be a problem for gov policy.

Secondly, again not expected soon, but Lithium is a storage technology enabler, and like all technologies there will one day be a better tech that replaces it. Hopefully not soon enough to hurt us - but again it can and will happen, eventually.

Thirdly, mine technology can evolve - particularly in such a new space - making you existing cost efficient plant suddenly not cost efficient enough, requiring new investment. This has even been happening in something as staid as iron ore recently.

Fourthly, spod is attractive to the Chinese because they are invested in its processing tech, not so much the US - so we currently have one major customer. In business (read Porter's theory of competition) this is very high risk. We desperately need other big spod consumers - or to invest in the process to Li2CO3/LiOH ourselves (as a country).

Fourthly, with respect to PLS specifically, we don't yet have everything in place to start digging, and every day's delay is burning up the cash at bank. Again we are confident this is a formality, but until all the little ducks are quacking together, we do not have choir.

Lastly we have only three local producers. Two of which have been going less than 12 months. Not enough for economies of scale, (regarding marketing, mine expertise, training, finance, stock analysis and all the other business stuff that goes to strategy and profitability long term).

All these factors are precisely the reasons why there are potential outsized gains to be made by investing now, but are also the reasons why we are a cinch to short and manipulate. This will continue for a while, no matter how faithful we are as believers.

Finally with respect to the possibility of a CR - except for G which was announced, (@AvJo) I would be surprised if that was the route taken now for the first stage at least. Assuming the deal struck is approximately as we understand it, I would expect that debt finance would now be pretty easy to raise, and doesn't actually have to be borrowed today, but rather can be a revolving line of credit, with ramp ups subject to achieving contracted milestones. Of course that depends on the actual price in those sales contracts - which we don't know - and how they are currency hedged - which we also don't know.

None of this is bad, but it is foolish for us to think that the market is completely wrong in our pricing and that it will rocket up tomorrow. While the sales deal was welcome, that price jump to 44c was driven by only 5m purchases - where were the rest required for follow through to a higher high? We may believe in it all, but there are not yet enough of "us" prepared to take on the risk profile as it currently stands...and in Oz that is sector wide, not just for PLS. While ever that remains we will be a shorter's gift, because right now we have atracted too much attention, and not enough attention. I don't expect them to go
away any time soon. I do expect them to take regular breaks between bouts of annoying us however.

We need the ML, we need production and we need actual cash in the door. We also need more successful cash positive Oz lithium mines - which is why the HC habit of attacking other Lithium stocks on the board is counter productive to all our interests.

End of rant.