vicious circle, page-32

I question i don't have an answer may be someone here can shed some light. I have been an investment banker myself but can't wrap my head around what happened at Galaxy with the POSCO transaction. What advice was sought?

Question is why would POSCO pay $280 million for a resource and then spend an another $475 million to build a 25,000 ton LCE plant. That's a total cost of $755 million to them. Now let's assume GXY spends the same $475 to build the plant our cost will be $200 million net of taxes in equity plus an additional $275 million in borrowings.

The two companies will jointly spend a total of $1.03 billion to produce $50,000 tons LCE capacity. The resource will perhaps last 40 years or even more. The discussion of present value beyond 40 years in any case is meaningless.

When the Galaxy -POSCO deal was announced Galaxy was valued at $1.2 billion. Wouldn't it have been wiser that POSCO had invested 600 million into Galaxy for a 40%~ share, produced a 50,000 ton LCE and saved a ton of money for both company's shareholders ($80 million unnecessarily paid in taxes by Galaxy and $155 million by POSCO).

AT is now trying to bring a JV partner and would dilute shareholders further. Theoretically we could loose 60%-75% of the Salar now to third parties. Whatever this board has done they need to be sacked for making all these decisions without placing such decisions in front of the shareholders to decide. This is despite some knowledgeable people considering AT a very wise man.