Here's some key points to remind all of us LT SH's why we hold this stock during these gloomy SP times!
(Article from Charlie Aitken 31st May 2018 who has changed his view from speculative to high conviction investment for his AIM fund).
"While Kidman is still around 2.5 years from production, in our assessment, we believe it is on track to become the preferred ASX lithium exposure, since no other global lithium exposure ticks all of the following boxes:
First quartile cost lithium hydroxide
World class scale
189mt @ 1.5% lithium oxide (Li2O) (the third largest hard rock deposit globally by contained lithium)
Initial production 44ktpa lithium hydroxide (LiOH) but scalable to 88ktpa or
110ktpa LiOH longer term
Best-in-class partner in SQM
Produces ~25% of global lithium production
Has been producing lithium for ~24 years, essentially started the battery-grade lithium market
Sells 26 different lithium product
Has 300-400 lithium customers around the world
KDR will have the option to sell any of its uncommitted share of production into SQM’s customer network
No Chinese counterparty risk (many hard rock peers sell product to China for conversion)
No complex brine processing risk
Australian sovereign risk (no south American sovereign risk)
KDR is also a pure lithium exposure, with 100% of revenue to come from lithium. Many of the large existing lithium producers are not pure lithium exposures, including SQM. Remember, the greatest gains in Fortescue were made in the years leading up to first production. I think this is what happens next for Kidman as its register becomes institutionalised as it de-risks. I also wouldn’t be surprised to see a major car manufacturer take an equity stake in Kidman alongside another offtake agreement. If that proves right, Kidman shareholders will most likely never have to write a cheque to fund the mine and refinery development. "
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