Originally posted by mattilla
While I appreciate the tip-of-the-hat I don’t think AGY is a great comparison for MC with GLN. I’ll say this at my peril since I know a lot of people here invest in both.
AGY is shaping itself as a small boutique operator - they’ve taken a tiny resource with horrible chemistry, and through some chemical wizzardry have been able to fashion it into a potential short term producer of BG LCE, seemingly able to tailor-make LCE to a battery producers exact specification and eliminate any reprocessing. Personally I think too many retailers fell in love with the AGY fairytale (myself included) and the price got driven to crazy levels - levels that well exceeded the project value and still had a bucket load of risk attached. Some clever traders made a lot of money, and some retailers that were late to the party got stuck holding the firecracker when the fuse ran out. It has since dropped back to the realms of reality and lots of those folks just need to wait it out.
I still follow them because their business model is fascinating and unique among lithium plays, but it is yet to be proven. Time will tell what deal they come up with, but I wouldn’t use them as a measuring stick for other plays like GLN.
I think GXY/POSCO is a better comparison, but you need to view it through the lense of current market sentiment, which is sheet. GXY for example is running at maybe 30-50% of their PVE. It will be the same for us.
Price analysts seem to think this depressed lithium pricing will continue for this year at least, which flows through to lithium share prices. So 12 months from now (assuming we prove a JORC similar to POSCO) I see us trading around $200m (50% of the POSCO sale) if market sentiment is still down. It will lift to somewhere between 200 and 400 as the bull market returns.
Pricing after that will depend on production rates, capital costs etc, but all going well our long term PVE should probably be in the order of $1B +/- %30.
All just my opinion.
I agree with most of your post,except the “tiny resource with horrible chemistry” part.
I’d say “tiny chemistry due to the fact that the JORC is only based on depths drilled to 100mts”. The co has stated, they can go much deeper and upgrade the resource as required.
Challenging CHemistry is a better description.......imo.
That’s all, I think you’re on the money with everything else.
Sorry for discussing other stocks folks.
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