Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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I can assure you that the big gaps in sellers price will be filled. Good to see some good movement and the 25 cents wall wiped but hopefully doesn't get build by tomorrow again and we can move a but higher. Gaps never remain gaps. If the LSE can.keep the momentum maybe the ASX can follow. Will be interesting to see if David Reeves will exercise his 1 million options at 16c that expire in August.
Oz up 2.04 % and looks to head higher from here , Share sellers thinning our and big gaps in prices set to go off like a coiled spring .
@Fingers. I agree on both points. Just worth airing why some believe the share price is where it is today - as the worm turns on Lithium prices, and progress reports on the new production method, with presumably improved NPV's bandied about, we should see increases, potentially spectacularly so from here. Feeling patient? I say that, but AIM is weird at times, perhaps as this news gets around the share price will rise despite lithium prices staying subdued since so many bought much higher than today's price and are willing to wait it out? - they've already waited this long, what's another few years, but much sooner if buyers want in but holders aren't (easily) willing to let them. AIM is weird. Did I say that? LoL ;-) And by weird, I mean unpredictable...
observer , half the project for three times the production , means we would be accretive
observer , there is no chance in hell our first sale of Lithium will only be $12,000 a tonne more then likely north of $14,000
Great thread to read this. Thanks all contributors.
Thanks for the welcome. What a discussion! I'm in though on the same basis as antelope - more positive enthusiasm than anything else. :)
One afterthought, even though it's not especially original... VW own Skoda. If they were to buy out EMH, they'd be in the CR as a car manufacturer and a partner with a largely state owned and very large utility with whom they'd own the largest Li resource in Europe and who will themselves be building batteries. There seems to me to be a lot of synchronicity there.
Wow, what a joy to read sensible and intelligent posts and a proper discussion. Thanks. Only sorry that I have little to add other than to share the positive enthusiasm. I'm in here with a historic high average mind you. I have to be positive :-)
Do remember that CEZ are planning their own battery factory. Unless I've misread something.
I don't think the transportation of carbonate or hydroxide has been gone into greatly here as one of the main desires ,for want of a better word is to have the lithium mined and processed all the way down stream to end product ,wether that happens all the way to a battery then they are shipped to who ever the customer is in Europe who knows but the Czechs were very pro this to happen within Czech republic,always room for flexibility if it suits a company/ government.
Transportation of the end product ,what ever stage that may be at ,should be straight forward with great rail links to other European countries ,Germany are very close to Cinevec and also having a lesser portion of the geological area over the border,possible chance of ONE processing plant for both companies to use but BCN who have large stake in Zinnwald are going the fluoride lithium route last time I heard so another method of processing possibly so who knows on that one.
Euro grants and loans to help Emh with any funding strong possibility ,I'm sure European countries would rather the product was used within Europe for benefit of Europeans ,lower transportation costs if all kept very local.
Keith has many interviews to listen to and is someone who replies to sensible Emails from investors another plus point for Emh ,lots that can be chewed over and IMO it's what's to be done now rather than if anything will get done now CEZ are on board.
Some good points @enteleon, I hadn't heard about the transport differences between hydroxide and carbonate. Got any links? My understanding is that the LiOH is created, stored and shipped as Lithium hydroxide monohydrate (LiOH.H2O), which is crystalline, not a liquid. i.e. not too dissimilar to the carbonate form, so I would have thought transport costs would be similar? I'd heard it doesn't store for too long though, of the order years. I can't remember if that applies to both forms, or just hydroxide.
In terms of: "Are we in a situation where the enthusiasm for lithium sparks all manner of projects and there is then a glut ", I highly recommend taking a listen to the interview that @jimb2 linked to the other day where Rodney Hooper explains that even if he had unlimited money today he'd find it very hard to get the mines up and running in time to meet the demand. The argument goes something along the lines of a new battery factory takes 1-3 years to build. A new lithium mine 5-7 years. The numbers are off the top of my head, if you listen to the interview perhaps you can post his estimates here? :-)
"Tesla's Lithium supply chain mapped out" (31 May 2020)
https://www.youtube.com/watch?v=rZV_qI2OkeU
===[
This episode of Tesla's Battery supply chain we cover Lithium and map out Tesla's global Lithium supply chain.
To help with the topic Rodney Hooper from RK equity and co-host of Lithium Ion Rocks podcast will be a guest on the show
]===
One thing I remember about the interview is that it wasn't made clear that it's 0.8kg of LCE per kWh, not 0.8kg of Lithium per kWh. So some may have come away thinking much more lithium is required per Tesla than in reality is required as 1 kg Li = 5.323 LCE.
Ob.
Observer- thanks once more and very important to factor in possible futures for lithium (hydroxide and carbonate) prices.
Maybe we can only make guesses here based on likely trends in our now de-globalising World. I have been surprised , and actually pleased, that the climate change lobby has gained serious traction in the last year. I'm on my second hybrid motor-car.
I am pleased, but somewhat surprised, that Elon Musk has made such an impact in the gas-guzzling USA.
There are obviously a number of speculative lithium projects, an example being ALLIF, a US-quoted company exploring the Argentine/Peru triangle, wherein lie the best brine deposits. I understand that Lithium Hydroxide is rather difficult to transport(certainly more difficult than Carbonate) and I have, perhaps rather foolishly, maybe over-rated the concept of OEMs wanting to drastically shorten supply-lines. In this respect, I have concentrated heavily on European sentiment and local availability of lithium. I am not familiar with the exact dynamics of the Chinese-derived lithium market. I do know that Albemarle, the US major based in Charlotte, North Carolina, is champing at the bit to get slices of the action in Australian lithium deposits. Indeed, I've just heard that the top-knobs at Albemarle will be attending the Deutsche Bank Virtual 11th Annual Industrials and Material Summit on Tuesday, June 9th. Doubtless, the lithium market will be high on the agenda. You are absolutely right to draw our attention to the lithium price. Are we in a situation where the enthusiasm for lithium sparks all manner of projects and there is then a glut ? Thank you, I will keep this very much in mind as a major factor.
Good luck and keep safe !
IMHO the biggest potential downside, which is also the biggest potential upside for the Cinovec project is the NPV's sensitivity to the lithium price - more so than any other lithium project I can recall. WHI used $12,000/t LiOH in their valuation which they claim is reasonable as "Lithium hydroxide currently achieves a premium to lithium carbonate (15-20%), a differential that has been higher in the past, but price differential that will be maintained in our opinion". However, the current spot of carbonate according to the LME is $7,500 which would make LiOH (at 20% premium) as $9,000/t LiOH.
You'll see from figure 3 on page 9 that this 25% reduction in the Lithium price would reduce the NPV, and consequent share price considerably. The flip side being a 25% increase to $15,000/t LiOH would near double the NPV, and consequent share price.
Most invested, or starting to think about investing in lithium are doing so predicated on vastly increasing lithium demand in the next 3-10 years. If the price starts to rise over the next year or so in anticipation and then in response to this demand in the absence of vastly increasing supply it's quite likely IMHO that Cinovec will get it's funding and construction will begin. Just a matter of time.
You did ask...
I was about to send when I realised that LME also report LiOH prices:
https://www.lme.com/Metals/Minor-metals/Lithium-prices
===[
28 May 2020 9.75kg/t
]===
That's a 30% premium to carbonate - so the potential downside perhaps isn't as great as I thought. ;-)
Ob.
Observer- good observations, thanks. Yes, I don't believe there will be massive dilution, but I have factored it in to my calculations. For so many oilers/miners/biotechs/small pharmas, it's just a fact of corporate life.
I always lay out the pros and cons in my analysis and I am genuinely struggling to find an array of cons. I think there's a bulletin thread on this board which is headed "What's not to like !"
But, I'm trying not to get too attached or carried away with fanciful notions. I would love to hear from any posters if they have serious doubts on any aspect of EMH. I would be very keen indeed to factor in any potential elephant traps.
Thanks again.
Potential for massive dilution you say? I'm taking the below from WHI as suggesting that due to its location and strategic value EMH's contribution to the CapEx could be near 100% debt funded meaning no, or very little further equity funding is required. And after all, half the company has already been equitied away to CEZ - potentially in a you scratch my back and I'll scratch your's arrangement. ;-)
===[
We believe that with the location in Europe for EMH’s project and the many car manufacturers pinning their future on EVs, and the potential growth of a significant battery industry, an environment will be created where industry participation and/ or EU guarantees in the funding of the project may be a distinct possibility.
]===
But perhaps that's not going to happen. Say EMH had to find $275m (its half of the $550m CapEx estimate) - perhaps at 4:1 debt to equity - that would be around $55m in equity, quite feasible with a share price several multiples of today's. Fully funded to construction decision is quite impressive for a junior miner - OK, half the company had to be sacrificed, but still! LoL. :-)
Ob.
Observer: Thank you, yes, I have. With only 154M shares in issue, I think that 62 pence target could be quite an underestimate, equating to under £100M market-cap. Obviously, with a CAPEX of something like $500M to actually develop the mine to fully functional status, that leaves a big hole for massive dilution. But, as sentiment is changing EU-wide regarding lithium, I anticipate that there will be massive support for EMH to make this project work. In fact, I would argue that this is a project that will just not be allowed to fail, period ! What exactly that means for EMH is another matter. Having an ethical EU Govt steering CEZ heavily derisks the chance of dodgy dealings; there will be too much visibility here. Also, even after Brexit, EMH is headed up by an Australian and is quoted on both the Aus and Frankfurt Exchanges. Thus, again good visibility and unlikely to be anti-UK political shenanigans.
Indeed, although not part of my investment case (I never buy just on the hopes of a take-over), I think that EMH will get taken out. EMH's asset is just too essential and valuable. The EU already regards lithium as a strategic mineral and it will be crucial for particularly German industrial survival. That's exactly why I deemed it OK to buy in heavily again today. Apart from general market volatility, I just don't see any serious downside. Buying early is, in some ways, protective.
I remember buying SXX at 2 pence. I sold way before the crazy peak. Even if I had stayed the course, I would not have lost money, unlike so many decent folk who got sucked in at much higher valuations.
Good luck to you; stay safe !
I don't think I read this properly at the time as I've just noted:
===[
In our model we assume current spot prices ($12,000/t LiOH) through the mine life and have inflated our capital cost requirement from the June updated PFS to $550m (from $483m). Using these inputs we calculate a fair value at 62p/sh using a DCF methodology and 40% of NPV10. European metals is only at the start of its development cycle.
]===
I hadn't realised they'd discounted the NPV10 by 40% to arrive at 62p. Perhaps I should take a closer read... :-)
Ob.
@enteleon presumably you've seen this:
"WHIreland: European Metals Holdings: €29m CEZ Strategic Investment in Cinovec Project completed" (14 May 2020)
https://www.europeanmet.com/wp-content/uploads/2020/05/FN-EMH-140520.pdf
===[
Valuation
Our fair value for European Metals Holdings is 62p against the current share price of 13p.
]===
An easy 5 bagger from these levels if all goes to plan IMHO (and WHI's!)
Qd22- Great to hear from you. I put that story about Isaac Newton and Thomas Guy as a little homily. I hope it didn't sound patronising. I've done a Thomas Guy with AVCT; sold nearly all at a 60% profit; have a tiny bit left in which I don't care about. I have another great quote stamped in my brain:
Bystander to Baron Rothschild (member of the famous Austrian Banking dynasty):
Q: "How come you're so rich, Sir ?"
A: "Mostly by selling too soon !"
It grieves me when I hear about people putting their whole life savings into very speculative stocks. The harrowing stories about Sirius Minerals, Aston Martin Lagonda et al are bad enough !
I agree with you that the general markets seem way too vulnerable at present. How come the S+P500 is only about 10% down from its all-time highs in February ?? Just wait for the US non-Farm Payroll figures coming out this Friday ! And then the Q2 results season !!
I am half expecting that at some point between now and September, we will get another major downturn in sentiment. With EMH, we have great support at about 9pence, which is about a 50% downdraft from today. Would it vex me ? No. For me, speculation is about calibrating a future and I am comforted by the collaboration with CEZ, which is, I understand, 70% owned by the Czech State. That's a massive de-risk. What has encouraged me in addition is that lithium appears to have been in the doldrums, but now appears to feature in the collective EU mindset and is, therefore, in the ascendancy.
I'm no Warren Buffett, but he likes to buy what he calls "cigar-butt shares", meaning shares that have been neglected and sort of thrown away. He would not buy into EMH because it is not cash generative and has no dividend, but he would like the idea that it has a "moat".
As I said in my prior post, I was expecting no great creep-up in the SP. Indeed, there's a virtue in just plonking in each of the next several quarters on a pound-cost-averaging basis, with confidence in the very long-term. I just don't think I want to be doing that if, by October, the SP is 25 or 30 pence. This may be completely delusional thinking and I'm ready to be disappointed with quite a bit of cash on hand. In this respect, I am doing a bit of a Buffett- going in heavily early on and riding out whatever these somewhat crazy markets throw at us.
Anyway, great to have some super posters on-side who have given us such excellent and widespread research links. I do wish you well and very nice to converse this way. Please keep safe !
Good to see some new investors here , with a good deal of shares in sticky hands this can move quickly, so you could be right in getting in now ,lots of news still to come of course ,
I've followed you over, enteleon, and plan to buy tomorrow. Yes, looks very good, and I've been looking for something in this arena for a while. Just missed one in Australia: looked at it one day, and it was up 80% the next! My only worry is that if there is a major hiccough in the economy as reality hits after lockdown eases then this may get hit too. Mainly I've tried to steer clear of shares in the more 'normal' economy recently. But the driver behind lithium seems very strong.
Really enjoyed your Newton v Guy story on Avacta! Poor Guy: guilt-tripped into building a hospital! :)) However much good has come of it.
Fingers and Sid- You both and LawrenceH have been brilliant stewards of this board. I have to say that my original intention was to step in with further buying every quarter in the Triple-Witching Weeks leading into the 3rd Fridays in June, Sept, December and March. I just thought that things would tumble along and there would not be any big SP lifting as EMH's project schedule is quite long-term.
Thanks to your excellent research-links and comments, I have revised my buying schedule, not least because the SP is cranking up nicely. I bought quite a big dose at 10.9p not very long ago and before that at 10.53p. I have re-examined the investment case and have become even more convinced (thanks once again for the links) that there may well be premature bids for off-take arrangements. I have, therefore, stepped in today quite big-time, for me anyway, but leaving some cash on the top-line in case there is a general market swoop-down.
It's interesting that the market crash just after March Triple Witching (lows on Monday, March 23rd) did not affect EMH's price that much. In any event, I would buy again if there is any weakness. I just don't want to be caught out with a slow trickle-up in SP, cursing that I didn't buy more earlier.
Markets are febrile and jumpy, but you've only got to look at De La Rue's SP in the last couple of days to see that investors will jump in very quickly if there is a dramatic change in a company's outlook. I'm not trying to ramp (you guys are far too smart !), but I genuinely think that an off-take with one of Germany's majors (VW; M-Benz; BMW) could see the SP double. And that sort of spike would be essentially sustainable as it would grandstand EMH/Cinovec's prospects to the World.
When I examine my shares, and I only hold four major positions in essentially fairly defensive sectors, EMH comes out on top as being the most de-risked and opportunity-laden by quite a margin.
Time will tell, but again so many thanks for such brilliant research support. Best best wishes and please keep safe.
it's creeping up was only 10p in May :-) something's going to give soon i think.
0.25 233,454 3
0.27 4,000 1
0.3 28,750 2
0.34 55,000 1
0.375 11,948 1
This is all we have for sale Sid
Some nice sized trades today, some one in the know?