Ann: Trading Halt, page-48

Guys I have seen a sell down across the lithium world past two trading days and it seems panic has taken over from logic, it has all stemmed from the idiots running ORE trying to save face, I feel a break down is needed.

So whats going on with the ORE situation.

ORE are producing half battery grade and half technical grade, what does that mean?

Battery grade is 99.5%+ and technical grade is 99%.

Obviously battery grade is used directly for battery production companies like SQM are still getting $16k/t for their high purity high quality battery grade carbonate.

Technical grade is being bought to convert into Hydroxide, recent changes to Chinese EV subsides have made hydroxide more desirable battery material and this will only increase as we move to solid state lithium batteries.

So for hydroxide producers you have two options buy technical grade carbonate or 6% spodumene.
Which is better?

Right now as feed you need 8 parts 6% spodumene to make hydroxide do the math on your own price expectatiosn $750-$950 whatever you like times by 8.

It's pretty easy to see spodumene is much cheaper feed for hydroxide production than $10-12k/t technical grade carbonate.

So ORE has trouble half their production is technical grade and spodumene shipments have begun, as PLS/AJM/A40 start to hit name plate their buyers hydroxide buyers are going to evaporate.

So what does this mean for hard rock plays? is this bad news? no absolutely not.

We have stolen market share and forced technical carbonate prices down due to the ability for hydroxide to be made for much cheaper due to our high quality low impurity product.

Even if we were to sell at top dollar for $950/t it is still cheaper than the technical grade carbonate ORE has been selling, the fact buyers have been paying that much for technical grade carbonate recently that tells us demand for hydroxide feed is strong.

ORE are in big trouble and they made a really really terrible announcement trying to sugar coat their situation and it has sent shockwaves through hard rock lithium players when it shouldn't.

When we look across the board big players SQM and ALB are selling brine projects and canning brine expansion plans, to heavily invest in WA hard rock at top prices, it's just another reflection of why brines are out and hard rock is the future.

We are in the drivers seat with the best high purity product and long term offtake, hopefully this trading halt will see us come out with adjustments to the burwill agreement and a new offtake partner at a fixed price for a long term deal.