'What's the opposite of freefall? Upfall?'Hi
@Mute22 et al,
I believe the term is called
'skyrocketing', and looks a little something like the two pics below.
View attachment 3997334View attachment 3997337Lithium prices are literally skyrocketing and smashing one all-time high record after another.
Lithium prices are shattering the roofs of the empty Chinese Lithium warehouses and and have been
breaking new all-time high records every consecutiveweeksince w/c July 19 last year.
In terms of undersupply, there appears to be no end in sight. Hence why Manono is required at full capacity (20mtpa? 40mtpa?) ASAP.
According to Statisca, global car sales for 2021 are expected to end the year at ~66 million (still TBC).
• Global car sales 2010-2021 | StatistaOnline publisher
ecogeneration reports:
Global EV sales set to smash records with 7 million cars in 2021 while crossing 10% annual threshold | EcoGenerationTherefore, despite the increasing undersupply global battery raw materials, batteries and recent chip shortages,
global EV sales remain on track to reach 90% share by 2030, well above the Seba s-curve slow growth scenario of 6% penetration by EO 2021
View attachment 3997349and pretty much keeping pace with with central s-curve scenario of ~11% by EO 2021 (see below).
View attachment 3997352Therefore, EVs (powered by Lithium) remain on course to achieve
50% sales penetration by 2025, and
80% share of all new car sales (world domination)
by 2027-2028.
[ sidenote: despite the rapidly rising costs of battery raw materials, materials like Lithium, Cobalt, and Nickel are still a relatively low input in terms of the total cost of manufacturing an EV.
View attachment 3997526https://www.mining.com/ranked-top-20-evs-of-2021-costs-jump-as-lithium-cobalt-nickel-prices-surge/The other point to the above cost data is that efficiencies created by increasing the volume of each EV model produced (especially at the more affordable end of the market) should largely mitigate the impact that higher raw material costs and other inflationary pressures would otherwise have on margins & the overall cost of producing an EV.
Along with each auto co.'s ability to secure raw material supply, the ability to transition to efficient volume EV manufacturing is key to keeping costs per unit down & will ultimately determine whether traditional mass market auto co.s like GM, Toyota and Ford will be able to compete with the likes of Tesla or not
]Tin is also another 'specialty commodity' that is on a steep trajectory upwards and like Lithium, supply is required to grow exponentially in order to meet e-mobility and other demands. Remember, Tin is basically the glue for all electronics. Other fast growing sectors including Robotics & AI all require Tin.
View attachment 3997640Tin 3-month futures recently smashed out a new all-time high of $41,545. blowing right through
$40,000/t barrier in very convincing fashion. Even after a $1200 retrace on Thursday & Friday, Tin still managed to close the week comfortably above the $40k/t mark.
View attachment 3997343Now let's relate the above exponential re-rates for Lithium & Tin to AVZ's
April 2020 Definitive Feasibility Study (DFS) estimates based on Roskill's LT contract pricing of;
SC6 =
US$699/t,
LCE ~
US$14,700/t (US$7355/t PLS)
Tin
US$9955/t (ITA based estimate)
The incredibly exciting
silver liningbehind the current but temporary IMO
grey cloud (aka ML delay) is that both spot and more importantly, long term contract prices for Lithium & Tin continue to rise month after month.
That means a continuous improvement in the upcoming
2022 Bankable Feasibility Study (BFS) for each and every month that it is delayed. I say 'continuous improvement' because the steady increase in Lithium & Tin prices each month equates to PURE & compounding PROFIT. The unforeseen delay to the ML is literally turbocharging the upcoming NPAT, NPV, IRR to be reported in the 2022 BFS.
This is IMO perhaps part of the reason why AVZ's SP continues to increase week on week, despite the lack of apparent progress on the ML front.
View attachment 3997652If so, then inadvertently we should all thank Nigel and say "Well done on the delay".
Though in fairness, my understanding is that the ML remains in the hands of DRC govt bureaucrats who seem to be carefully dotting their 'i's and crossing their 't's' before issuing an FTO, which is fair enough given the importance & size of the project (& therefore largely out of Nigel's control).
And in the meantime, let's not forget who has been buying AVZ shares from some of the LT retail holders who have understandably banked some well earned profits in recent months.
View attachment 3997655IMO we are witnessing an early, gradual but sustainable transfer of ownership to deeper pockets, and I expect this to accelerate once the ML has been approved, and once AVZ becomes part of the
ASX 200 at the next rebalance (March) IMO and Global X's LIT ETF adds AVZ to their holdings for the second and final time IMO. All in all, am very happy about the above developments and the impending global coverage and further appreciation that 'heavier hitters' will likely provide AVZ from here on in.
Those who have the nerve to hold
beyond $1 will be richly rewarded in due course IMHO.
Furthermore, imagine if the price of gold rose from US$1800 to to US$6800 in the space of
5 months and what that would do for the SPs of gold stocks. Well, this is exactly what has transpired (in performance terms) in the Lithium space i.e. Battery grade LCE has skyrocketed
from US$13,700 in July last year
to $51,550/t currently.
However, the BIG difference is that filling the supply gap in a
relatively small & complex concentrate & chemicals market that needs to grow exponentially is years away due to the time it takes to develop & build a Lithium mine (5-7 years best case or 17 years on average if your deposit is located in the USA
- see link below), or to upscale an existing mine that has its own unique set of issues - noting that as an example, PLS downgraded their 2022 production forecast recently despite much higher prices and recent speculation that their Q1 BMX auction may fetch up to
$3,900/t SC6 equivalent.
https://www.washingtonexaminer.com/...eliance/time-for-an-american-mining-evolutionBy contrast, gold & other larger, established and more traditional commodity markets don't face the same degree of complexities IMO.
In addition to the many production specific issues that
less homogenous,
lower grade & or
smaller scale Lithium projects face, many projects are also facing enormous environmental & or political headwinds. eg. Jadar & other European deposits located within densely populated areas, some US deposits inc. Thacker Pass & Piedmont, Chilean projects facing 'state participation' (meaning state owned) from the incoming and young Leftwinger President-elect and his govt., many Lithium triangle brine projects facing heavy environmental opposition due to the depletion to aquifers and impact on fragile desert ecosystems, and the list goes on.
https://cde.news/serbian-activists-block-roads-in-protest-against-lithium-project/https://www.mining.com/web/chile-court-halts-lithium-auction-days-after-quotas-awarded/And so the reality is that bringing forward and upscaling
future Lithium production globally is an incredibly difficult thing to achieve, and comes with a myriad of issues, regardless of the rapidly accelerating price incentives to do so.
In Australia, new mines like Wodgina & Kathleen Valley face major labour shortage issues as far as the eye can see. And never mind the increased cost of labour and energy - with good 'ol Oz among if not the highest costs on the planet to operate a mine.
My point to all the above is that the recent Lithium price explosion is REAL and here to stay IMO (simply due to the market begging for more supply to come online, and as per the above s-curve scenario) and therefore current prices are in no way speculative IMO. And never forget the Tin i.e. the same overall message applies, albeit for slightly different reasons.
So
Gold as an investment? Meh IMO.
Uranium? Catastrophic history & remains deeply unpopular with voters worldwide, despite its unique benefits for the planet (not including the radioactive waste that is stored underground for future generations to deal with) .
Oil & Coal? How about we stop burning stuff (for a start) if we are serious about combating the accelerated (man made) heating of our planet. Oh, and as a sidenote, protecting what is left of our forests, waterways, oceans, reefs & peatlands (and the remaining species that live within) while reducing toxic landfill waste, might also be a great thing to do for our kids, grandkids and future generations.
Hottest ocean temperatures in history recorded last year | Oceans | The GuardianIron ore? A large and relatively mature market. Potential upside vs risk?
Nope, there is no place I'd rather be right now (and probably for the next few years at least) than scalable & ESG friendly
Lithium & Tin projects. This, along with some of the other new technology metals eg. Rare earths, is the No.1 place to be IMO.
And on that point, Manono IMO is an immortal unicorn beast in a field full of horses of varying size, health and might. AVZ's Manono boasts the largest hard rock deposit (contained Lithium) globally (by far) as well as the second largest undeveloped Tin deposit on the planet. The potential for Manono to produce between
20-25% of future world Lithium supply (and only God knows how much Tin when you combine artisanal production with the main mine/s by-product) is unparalleled, and what makes AVZ extra special as an investment IMO.
AVZ Minerals - a rare and massive
two-for-one play on what is undoubtedly two of the hottest and in-demand commodities on the planet.
https://www.bloomberg.com/news/arti...high-commodity-prices-blackrock-s-hambro-saysGLTA and have a great week.
Cheers
Elpha
