This is a subject that I think all AGY shareholder will soon find a great interest in.
I do a bit of research and I'm come across a few interesting bits of info RE-Rincon. I don't think one just reads a bit of info and gets a advantage over other investors. I think if you read everything you can and then when you get 1 + 1 and it shows 3...well THEN you go all in (like I did).
He's what I've found.
1.
I like many were watching Enirgi Group (own by The Sentient Group) new 24hr Li processing with interest. However, I'm not concern by it anymore, not it the slightest. Why? Well, I'll agree, Sentient has spent a lot of money. They got ADY (the Rincon asset) for a steal back in 2010. They've put a lot of money into it and the new process but, it looks like it's a Dud.
Why?
3 things I believe and they are massive. This plant which is in Rincon...which cost any where between 200-250M+.
-Capex: Yet they freely admit that it's ONLY designed to spit out 1-2 tons a day (500 tons a year?) . So even after that massive spend they'd need spend how much to process 20,000 tones a year? My personal believe was there were just going to build this...get it to work then license the tech. to other brine miners. No need to spend another dine...just rank in fees.
-Opex: They aren't talking about how much it cost to make that 1 ton? Look at the plant...it's massive. They'll have "some" cost in pumping, then putting it through that thing? 5-10k? Even if they got 15k+ . That's not a great margin/
-and the BIG one...if you read Enirgi's press release...no where does it say the grade. It doesn't even say it's produced battery grade LCE. What it does say and this is a EXACT quote "The DXP Plant
is designed to produce battery grade lithium carbonate" . Word play winner of the year?
This is it in a nut shell. Think about it and use common sense. You just spent all that money...and produced 99.5% (min. for battery grade) Why aren't you yelling that out to everyone? Where are the OT agreements?
I think they are ONLY producing industrial grade LCE which they could ONLY sell for 5k-10...more then likely, under their cost to produce.
IMO...Enirgi's DXP plant is a dud.
So, that's the plant.
Now, I'll let you DYOR here but, those of us who follow everything that's going on can see that there have been many hires of senior ex-Enirgi Rincon staff over the past 6-8 months. Ummm, what does that tell us?
Many of Enirgi's Rincon senior staff are being hired by other companies. That's doesn't happen if everything is going great.
Ok, So we have a basic idea of what's going on there. However, we've talked about this in the past and most know about it. Why did I make a NEW thread -remember, the AGY HC rule? NEVER, make a new thread!
I hear a lot of things and talk to many people. When you hear so much it's hard to hear what's important or just noise.
Here is something that isn't noise...
"Use it or LOSE it!"
This is one of the mandates of mining companies being allowed to use government land around the world. Remember, These companies DON'T own sheet. They lease. The company owns the lease. The government lets the miners mine the land for a cut and also to create JOBS in the community. Plus, They make more $ by charging fees to make sure the miners follow all the rules and get permits.
http://www.dmp.wa.gov.au/Minerals/Mining-Tenements-explained-5145.aspx
U of WA
http://im4dc.org/wp-content/uploads/2013/09/Mining-Regulation-and-Policy-Course1.pdf
Pg.49
So if we put it all together then The Sentient Group owns a lot of land it's not using ore going to use.
It's also had the land for long time.
With PA's stronger relationship with the Salta's Mining Minster and the soon to be progress at Rincon with PAs results...I think The Salt government may be looking for companies to get RUNS on the board. The leases my be canceled and new companies allowed to bid.
THIS is IMO...and maybe the VIBE I've gotten from a few others too but, I think this is a reality for Rincon and The Sentient Group.
Ok, let's put that in a box for a minute.
Whether or not The Sentient Group believes they'll lose their current leases or not. They are a 3 billion hedge fund. They are ONLY interested in making money. Rincon is massive, just massive. Even if the government sliced off 10%-20% of their holdings (someone here can come up with the exact figure) that would be MORE then enough for AGY and even the largest S3 plant/OPS.
AGY has said this isn't on the table but, I believe with AGY's MC high enough and PA's process confirmed...a large % of Sentient's Enirgi Group could be had.
If you step back and look at it.
10% of Rincon is the same as 100% so I think AGY would go after 100%...maybe for cash? Or a good cash/script deal. Again, Sentient Group only concerned around making a return. They've put 200m-300M in to Rincon now. If they are able to make money off it...they would have. (see above) if they can't... well they own a lot of salt!
If they can own a piece of AGY and ride AGY up 5 bags...they could make their money back and them some.
There have been rumors about what Sentient has already tried to do with their interest in Rincon THIS year but, it's all hearsay even though it came out at the same time as they released their 1 ton a day plant results. Everything, depends on PA proving to the market. However, I think my above assumptions magnify the results. The Salta government itself may step in and decide what's best and the most profitable for Rincon. In the end...it's all up to them.
I believe like many that the process is way more important then the land holding as I think we have enough already for solid STAGE 3 numbers in the 10,000-15,000 range. Do we really even need 100x more land? Well, if we can get 100% ownership of Rincon and a process that produces 99.5%...then AGY's Rincon would easily be one of the biggest and most profitable LCE producers in the world.
Something to think about in the coming weeks.
