I disagree because GXY cash gives it substantial leverage in dealing with potential SDV JV partners and is also very useful to go it alone at JB if they so choose. It also protects us from the position all the Australian hard rock producers find themselves in right now. We can choose not to shut down production like PLS have indicated and instead stockpile spodumene output with full confidence that the Chinese converters, while offline, a ramping up for massive increases in scale. I believe I was one of the first posters here to go into a detailed explanation of the myriad problems facing the converters.
If GXY management is paying attention to any of these discussions, I implore them to continue production at record levels.
GXY has the cash to do this and our CCOP margins are still healthy enough that we aren't producing at a loss even if the pricing doesn't pick up for another 6-12 months. GXYs SP has been hit hard today because of the PLS announcement. Remember they do not have the luxury of GXYs current account positions or low CCOP. The most stagegic company decision is to make a counter announcement stating that despite the concerns of more marginal producers, GXY will continue at maximum production output. This decision based on having strong communicative relationships with longstanding offtake partners and recognizing their need for increased spodumene requirements following their brief but substantial efforts to increase their output capabilities. GXY is in the enviable position amongst its peers to maintain output to capitalise on this near term opportunity. GXY doesn't need to go offline to make minor adjustments having recently completed its highly successful YOP as detailed in the May announcement.
GXY Price at posting:
$1.42 Sentiment: Buy Disclosure: Held
