With regards to the JV with SQM, opinion seems to be quite polarized - for vs against.
Many of us mentioned the pros and cons in the Roadshow Presentation thread. However, I want to create this thread to specifically collate all opinions on the advantages as well as the disadvantages of the JV so that we all can debate, do further research and strengthen our decision and conviction to either exit, hold or buy more.
Pros:
+ Faster path to production
+ Integrated operations (mine + refinery)
+ Lesser dilution from capital raising
+ SQM's distribution network
+ SQM IP and expertise -> less chance to miss deadlines
+ Better long term profit and potentially higher NPV than the traditional spodumene concentrate operations (refer p6 of the road presentation + my quick and dirty calculation below which contains a lot of holes and errors in it.)
+ Leverage the JV for economy of scale if further resource is discovered (potentially a further 80mt of mineral?)
+ De-risk the path to production
Cons:
- Loss 50% of the resource
- May be taken advantage of by SQM
- Reduced/loss full control over the future strategy/direction of the resource
- The price is too cheap
- Lower chance for the SP to strongly increase in the near future
- Higher complexity (Mining + refining -> more chance for things to go wrong)
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My quick and dirty calculation:
KDR Price at posting:
57.5¢ Sentiment: Buy Disclosure: Held
