I quite like the metaphor that sometimes, one can not see the forest for the trees. It's an interesting expression and something that I have learnt over the years to indeed step back and try to observe the "bigger picture".
So it indeed applies here to our STX. Just reflecting on what I posted only a week ago... so much has happened in that short space of time to make me think, what is indeed going on with STX? My thoughts here... and again I will try to be succinct.
So we have had a bit of a run in STX, both SP rise and some solid days of volume. The chart, IMO and as others have said, is looking primed. If you watched some of the trading action and dug deeper into the buy / sell side stack through out the day, it was IMO, a case of someone accumulating, taking out line wipes and then tactfully putting up walls on the sell side to ensure it didn't get away from them or let the market run with it. It's not a new trick but one that is carefully orchestrated. I've seen it many a time.
I made it pretty clear last week that I feel STX is being pursued for reasons of it's importance in the burgeoning "critical minerals" sector. That is, the pure energy intensive nature of refining and "value-adding" to our abundance of natural minerals and metals that we are so fortunate to have in Aus, particularly WA (my home state I might add). The majority of this downstream refining can not be processed using renewable energy, it can only be primarily through the use of gas.
So then we have had a couple of significant events happen... one is the creating of the 3rd pillar for the US-Australia alliance in relation to clean energy and critical minerals. This was a major development. Fundamentally the western world is far too reliant on China for processing the likes of lithium, rare earths etc. and it is in the best interests for US & Aus to invest heavily in downstreaming these industries, which we are already seeing with the likes of LYC, ILU, LTR etc. This agreement will unlock billions of dollars for investment into developing assets in Aus/WA and IMO we are on the cusp of a significant bull market in this respect. We will no longer be a nation of simply digging up dirt and shipping it offshore - hallelujah! This will also mean plenty more M&A corporate activity is to come. Both at the small and big end of town. And whilst the focus may be on the actual lithium companies, rare earth companies and the like, the smart, forward thinking companies will understand that if we are indeed about to embark on a significant investment program in downstream processing, then energy requirements are a significant strategic piece of the puzzle. Without that piece of the puzzle you could be screwed. If gas pirces keep rising in WA past $10GJ onto $12 or $15, OK costs go up but what if the supply deficit is real and securing gas supply, on scale mind you, is real problem, what would you do? This is where I believe the strategic importance of STX comes into play. Park that for a sec.
We also saw this last couple of weeks a lot of interesting developments from India. We had India's powerful NMDC (National Mineral Development Corporation) fly into WA meeting with state govt and lithium developers (which included our JV partner, Hancock Prospecting). Then we had the Indian PM visiting this week, and sure enough, just so happen to met with Gina Rinehart. India, no surprise, have massive plans to grow their EV industry from 1% to 30% by 2030... and lithium assets is on their list for investment - big time.
So, I'm thinking... our JV partner... Gina/Hancock... has huge plans to invest billions into Lithium, that much we know., into her home state of WA, not only securing the assets themselves, (btw she has been outed as buying into the likes of DLI an emerging Lithium "giant in the making") but with the huge incentives to downstream lithium processing in Aus/WA as evidenced by Aus and USA, she would be wise to secure a lot of long life, plentiful gas for her and her JV partner needs. We saw her take out WGO like a snack, but hello STX... and how good do your PB assets look. Much like MIN is doing with taking out NWE (could be a dud I might add) and them doubling down on their expansion with Albemarle. Maybe Chris Ellison is thinking he can't let Gina take all the good assets in the PB... or maybe they have a JV for energy is on the cards.
Now we need to think big here. Think 30-50+ years mine life of some of these critical mineral assets... which means they need 30-50+ years gas field energy life. What better way than to lock up some of the best (maybe the last?) acreage in the world-class PB, I reckon STX fits that bill. I think we all do. Some food for thought there...
But then there is also this... I read that FMG, with their pivot and subsequent multi-billion dollars investment into their clean energy FFI business, well they have been exploring for Lithium for 7 years... and found nothing of scale and now their new MD, Fiona Hicks, is on the record as saying Lithium acquisitions are on the cards. FWIW Fiona is ex-Woodside energy and she would know very well the energy requirements for FMG's own downstream processing needs. Makes you wonder what FMG might be planning with their vertically integrated clean energy / critical minerals ambitions....
To add further intrigue is news that ExxonMobil has recently made an investment into the lithium space in the US. Sure it's only $100m but the underlying thematic here is that all "old school" players are looking to diversify their interests, they have to diversify but it is clear gas is part of the transition fuel. So whether it's the traditional O&G giants of Shell/BP, the mining giants of BHP/RIO/FMG, all interwoven with the new generation embracing the critical minerals transition... there is alot of happening on a domestic, regional and global scale. It really is all very interesting.
What could that mean for the likes of an already billion $ MC coy like STX? I think they are in play and if my read of the situation is correct, I feel it is most likely our current JV partner Hancock, making the strategic move and building her presence on the register. Maybe that's why the Top 20 is on hold... Let's see if anyone is keen to crash the party... I feel we will be seeing some fireworks fairly soon.
GLTA
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