I don't find it bizarre at all. ORE has been rapidly expanding on two major fronts and could very well have 27ktpa BG output within 2 years. ORE is still profitable despite the massive fall in Li Chem pricing- particularly within China - and following with price reductions to maintain market share. ORE locked in US$180m finance for S2 at Sales de Jujuy at rates below 4% across 9.5 years just last year. At Naraha in Fukushima Japan where ORE has a 75% Economic interest, the Japanese government is subsidising nearly 1/3 of the US$90m Capex and remainder is being funded for the most part with loans below 1% IIRC. GXY is finally showing signs of developing its Sal de Vida asset in Argentina and aiming to join the club at the lowest end of the marginal cost curve while both PLS & GXY have substantially moderated production of their Li Chem precurser operations in WA. PLS has interest rates at 14%, GXY is cashed up albeit still spending excessively and AJM which has been operationally excellent is trying to refinance a crippling debt of US$143m @ 15%pa while last published EBITDA which was for Sept Quarter is best measured in the hundreds of thousands while they have an interest payment due now of AU$16m. What I find "bizarre" is that ORE which is a Lithium Chemicals producer was treated no differently to independent spodumene miner / concentrators that were selling Lithia concentrate to independent Chinese converters to convert into Lithium Chemicals. Those miners had promises of endless additional stage expansions which have evaporated while ORE is actually progressing with major expansions. Chalk & Cheese really, but the market decided it was all "Lithium".
ORE Price at posting:
$3.44 Sentiment: Buy Disclosure: Held
