Kylie? Real mature that’s about an 8yo level of humor you have...

Kylie? Real mature that’s about an 8yo level of humor you have there.

There are many more similar reports echoing my views outside of the Morgan Stanley one.
The fact is that if you choose only to listen to the industry hype still surrounding lithium you will not see the reality that is, the forest through the trees.

It is becoming increasingly clear that the market is maturing, and beginning to view the Lithium sector in two traditional segments - Producers & Explorers.

The dynamics that drove the Explorers through much of 2015-2017 (announce a huge resource, talk up the massive demand for lithium) is no longer exciting the market like it once did. We've seen BGS announce a doubling of their resource (to minimal share price response) and AVZ constantly crowing about the largest deposit ever (again, minimal share price response).

Why?

Because the extraordinary margins and opportunity will be made in the next 3-5 years.

Notwithstanding that Morgan Stanley are overestimating how soon the market will come back into balance, we can all agree that the market will come back into balance at some point. It's just unrealistic to think that companies will be making 80, 90, 150, 200% margins on their product forever. If prices remain elevated, more supply will come online at some point.

The Producers (and near-term producers) are therefore facing the traditional dynamics of a mining company, but with the EV/Battery-tech supercycle behind them. Consequently, they're an asymmetric risk bet....either they can get product out according to their offtakes, and they'll capture the cream of the tight market over the next 3-5 years, or they won't and they'll miss the opportunity.

I consider LRS to be missing the opportunity.
Another year with no results and no resource and well, it would be unrealistic to think they will make it to becoming a lithium producer after that.