Hi GCar.
Personally, I don't have a strong opinion as to whether MR should stay or go. That being said, I think it's worth addressing your point about what actions or inactions by MR have specifically affected the business. You mentioned that MR's key role is to ensure the board is effective in setting and implementing the company's direction and strategy. Fair enough, so what is/was the companies strategy? Looking back at the annual reports over the last three years, MR has stated that GXY's strategy was "to becoming a leading global supplier of high quality lithium products".
I think it's fair to say that the strategy has not yet been achieved, as GXY is most certainly not a leading global supplier. So if we accept that it hasn't yet been achieved, what progress has been made towards achieving the strategy of becoming a leading global supplier?
In my opinion, GXY's only chance of becoming a "leading global supplier" lies with the development of SDV. Therefore, I think it's fair to surmise that the development of SDV is the primary driver of GXY's strategy. If we can agree that SDV is in fact the primary driver of GXY's strategy, and that MR is ultimately responsible for the implementation of the company's direction and strategy, can we really say that MR has done a good job? Sure, GXY sold the northern tenements, which was a lifesaver in this environment and allowed the company to fund initiatives such as the YOP. But what about actual progress in developing SDV. Five years ago, the 2014 annual report stated this:
Galaxy began work on certain revisions to the original Definitive Feasibility Study for the project, with the objective of adopting a staged approach to the development of Sal de Vida. This will mean that Galaxy will look to progress phase one on the basis of a reduced initial production capacity, in the range of 6,000 to 8,000 tpa of lithium carbonate equivalent (“LCE”) with a scaled down capital expenditure of circa US$120 million.Sounds similar to what we're doing now, doesn't it? Yes I know that we've changed the flow sheet, will be producing primary grade and the production quantities are unknown, but what I'm pointing out here is that GXY was looking at a staged approach with approximately US$120m CAPEX over five years ago. And now, here we are five years later with one test pond lined. That doesn't look like a smooth, well managed execution of the strategy to me.
In my view the company's strategy is being executed at a glacial pace. MR has also approved investment decisions that not only did not fit with GXY's strategy (A40, LPD), but actually detracted from it by reducing the capital available to progress the primary driver of GXY's strategy (SDV development). Add in some nepotism (Nick Rowley), and I can't really come to the conclusion that MR has performed to a good standard. Whether he deserves to lose his role or not is another story.
