The fundamentals are super important so that one does not lose sight.
Keep in mind the current trend exponential factor of 1.65 for EVs. Year over year. If this year was a bad year for car sales as mentioned by analysts and we get over 3.5 million EVs this year then that may indicate the prediction on current trend is conservative which means EV market may mature sooner.
The magic number is 9 million EVs per year. This means demand for Lithium cannot be absorbed by current miners. If this happens sooner than my prediction of 2022, then there could be madness on Lithium stocks in 2021. Certainly don't want to buy then. We witnesed this across the board in 2016/2017. When all Lithium stocks spiked. That was not because management did something great. It was because there was parity between supply and demand. This raised the spot price and the money garnered from this allowed further funding across the Lithium sector. Which clearly has already been spent. I would be amazed if management got funding before mid 2020.
Lake was already too late to capture the funding going on at that time. In regards to Lake it had lesser news than today when it scrambled over 20c prior to 2018. Lithium madness 1.0.
Lithium madness 2.0 I believe will capture Lake in the next round of funding as my review shows Lake needs to come online. Firstly Ganfeng and the like need to get a return from current investments. That can only happen with EV sales reaching parity with lithium supply.
Of course this is no guarantee. Nickel has the potential to slow down Lithium aswell. It too needs to be watched. Short on other battery materials will further oversupply Lithium. It is all very risky at the moment and complicated. The growing pains of an emerging market. The forces beyond management..
The big boys aren't looking at Lithium stock prices charts. They are looking at rate of vehicle production.They are looking at the number of EVs. They will time their funding for the likes of Lake accordingly when they and their shareholders get their money back on current investments.
Lake in production does not help Lake or the sector as a whole. That may sound counter intuitive but it is pure economics.
It all hinges on EVs.
After my review on the Lithium Sector I will then review other battery materials however I am now drawing a close on hotcopper for now.
When I bought Lake for the first time share price plummeted off the back of great news Did not understand this and so hence I decided to join this forum. As someone rightly pointed out without news one can get into conspiracy theories. Its true. I was guilty of it. Thats why I did my review so I can get back to fundamentals and a buying strategy.
Did I lose money on this stock? Nope. I didn't sell. Am I in deficit? Yup. Did i throw the kitchen sink at this stock? Nope.
That kitchen sink is still there and it will be thrown at 9million EVs per year along with funding for Lake. They are the only things missing and I believe intrinsically tied together.
For the poster who doesn't understand hardrock mining from brine. Hard rock generally refers to spodumene. A type of pegmetite rock that contains lithium. Brine refers to water with high salt content. It too contains Lithium Lithium is Lithium. No such thing as quality of Lithium. Quality if used refers to grade. Grade refers to parts per million ppm. This is affected by impurities. Impurities usually but not limited to Sodium, Magnesium, Potassium or for companies like Anson a crap load of iodine and Bromide.
When the word quality is used there is an implication made. The process required to remove all irrelevant parts which then in turn underlines the potential cost to do so. Therefore, the reason why Lake has $2600 OPEX is because they don't need to setup equipment to remove impurities 'material' other companies might have in their brine or hard rock. Less energy is used to remove lithium from brine than from hardrock. That translates into dollars in both Capex and Opex. This is attractive to battery manufacturers. They only care about bottom line. They are a business not a charity.
Lake Resources has one of the lowest levels of impurites.
Last but not least the hardrock and brine both are processed into Lithium Carbonate. This is where it matters. It is the final product. Not the type of mine from which Lithium is extracted. The ouput is the same and that 'quality' is determined by process irregardless of hardrock or brine or clay. Why Lithium Carbonate? Because Lithium does not exist on its own in nature. It always exists as an ion. Carbonate is a means of storing the lithium and easier to reconstitute into a hydroxide as required.
Right thats my Lot. I wish all sincere long term investors all the best. Lake should sit tight and survive till the market is ready..That should be easy for you long term savvy investors. Other than that enjoy life
Gonna take my new dog for a walk....haven't got a name for him yet........
LKE Price at posting:
3.0¢ Sentiment: Buy Disclosure: Held
(20min delay)