Andyrooo - I agree with much of your post (not the last...

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SimonGr

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25/08/19

19:37

Post #: 40141932
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Originally posted by Andyrooo: ↑

Nightflyer's most excellent shipping posts paint a gloomy picture so far of shipping for Sept19 quarter. I reckon some might go to POSCO and Great Wall in Sept19, though minor. The BODs have mentioned before they won't be making shipping announcements, so no surprises there.

However what of costs? They got through the plant upgrade rectifying RCR's faulty work 3 days ahead of schedule. Did they kick start the plant again? I don't know. Why would Ken start the plant up if no sales/shipping were expected? He wouldn't.

The Jun19 quarter cash flow report suggested Sept19 quarter processing costs of some $A47m. Is that happening or has Ken suspended operations pending supplier uptake again? I don't know.

So many non holding blow ins speculating on cashflow problems and potential CRs, even though we have $A67m in Bank plus undrawn USD15m debt facility. However they never mention Sales. Do they really think Kens gonna go full on production if its not going to be sold? There's no balance in their drivel.

KB's been through the disaster of falling commodity prices before.

While our SC6 prices have fallen from USD740 down to USD600, we're still cash flow positive, apparently. So why all this talk of a capital raise?

If there is no partnering process, then I doubt we''ll have any downstream JV participation OR Stages 2/3 expansion. Who then will Great Wall, POSCO and LG Chem seek out for raw material supply? The Brines aren't cost effective for LiOH, so who else?

ALB and WES haven't walked away from their supply deals. They paid big bucks too. How the feck has PLS MC fallen below $A700m? I recall the MIN and KDR SPs fell substantially before their sale announcements.

IMHO, manipulation by the Chinese at Stage 2 chemical conversion. Manipulation by Big Oil, Big Banks/Instos suppressing Lithium mine start ups. Manipulation by Instos involved in takeovers/partnering. Even manipulation on this forum discouraging retailers. Bloody hell, mate.

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Andyrooo - I agree with much of your post (not the last paragraph of conspiracy theories tho ).

However re: price/margin. Last qrt costs Don’t make PLS cash flow positive at US$600/dmt. Interest payments and admin costs would mean PLS was cash flow negative at these margins going forward. Also, Li China price markers have continued to fall in both Jul and even further in Aug (see Metal Bulletin). We don’t know the formula but PLSs Sep qrt SP6 price is very likely to be south of US$600/dmt.

Hence whether a holder or potential buyer, I think the concern is reasonable.

Last edited by SimonGr: 25/08/19

PLS Price at posting: 38.5¢ Sentiment: None Disclosure: Not Held
3 Upvote

0 Great analysis

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