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Very few countries have free trade agreements in place and not all of them have lithium Primarily Mexico, Canada, Australia and Chile
https://www.state.gov/trade-agreements/
It couldn’t be better timing for us though, not only a monopoly on Mexican lithium but also an exclusive club with the FTA in place.
To switch to EV manufacturing in Mexico the OEM’s will need to invest $Billions. They’ll only do that if the raw material supply chain is guaranteed longterm, scaleable and at the lowest possible cost. The supply and provision of electricity falls into the same category. All the factors must be satisfied. The stakes are high and the ability to access the US’s EV incentives is part of the check list. Mexico needs the EV industry to be a success as it directly affects the electricity storage market, jobs and a wealth of associated industries.
Sonora Lithium Project has the only proven reserves in Mexico, is scaleable and we already know the costs from our own scoping study. With Ganfeng’s flow sheet and access to lower machinery costs there should be further savings to be made. Their DFS will reveal just how much and at what price they plan to achieve for stage 1, 2 etc.
Time to sit patiently and wait for the politics play out …. we should know in the next few days. In the meantime the market value of Li is set to remain close to all time highs for the next few years. I’ll keep adding at these low prices just as one of our directors did as recently as July ;-))
All going as expected!
https://driveteslacanada.ca/news/stellantis-considering-spending-billions-on-ev-production-in-mexico/
Meanwhile, Stellantis executives have held meetings with Mexico’s key officials, including President Andres Manuel Lopez Obrador. Both parties discussed EV production and how to strengthen the company’s Mexican supply chain. Stellantis was concerned about getting enough electricity for the plant.
One of the critical considerations for Stellantis would be not missing out on the US’ EV incentives, as one of the requirements is being made in America. However, the policy’s wording does not explicitly mention that EVs must be made in the US.
#####
it hasn't been signed yet - just the ceremony and photoshoot
I'm not sure what they've bee reading:
• Tax credit of $3,750 for clean vehicles that satisfy a "critical minerals" requirement. To satisfy the "critical minerals"5 requirement, a certain percentage of the value of the critical minerals contained in the vehicle's battery must be: (1) "extracted or processed in any country with which the United States has a free trade agreement in effect;"6 or (2) "recycled in North America." The required percentage would start at 40 percent and increase gradually to 80 percent by 2027.
• Tax credit of $3,750 for clean vehicles that satisfy a "battery components" requirement. To satisfy the "battery components" requirement, a certain percentage of the value of the components contained in the vehicle's battery must be "manufactured or assembled in North" America." The percentage would start at 50 percent and increase gradually to 100 percent by 2029.
Keep going Tommy , just ignore the noise !;
actually… i forgot someone… mexico gov… ganfeng… and yours truly… kdnc… :)
all coming from sonora… the potential ‘saudi arabia of lithium’… lol…
there will after all… only be two sources of lithium in mexico… mexico gov… or bacanora…
you do have to wonder who will be 1st to build a battery gigafactory in mexico… and if mexico are buying bacanora’s lithium project… will they buy one of tesla’s machines that build the machines to go with it… and be the 1st to do that aswel…
Answer: Prufrock
https://www.boringcompany.com/prufrock
That’s Mexilit not Mexalit!
Expand into Mexalit….
Begs the question is the Boring Company able to mine as well as use their machines for tunnelling? ;-)
ob… ganfeng may be selling that 17.5/35ktpa project to mexico… to supply their incumbent domestic market with lithium… resulting in ganfeng moving their expanded project 100% into mexilit… which we’ve already shown is doable in our scoping study…
Thanks for the plug @EV. Can I take the opportunity to emphasis as strongly as I can that these valuations are based on MOST THINGS GOING OUR WAY. If things do not go our way, then they are very unlikely to materialise. I don't particularly want to go over the past, but I could explain in great detail, as could other knowledgeable LTH if we so desired, exactly which things didn't go our way previously leading to our near downfall to 3p. Will this time be different? It's certainly starting to feel that way, but only time will tell!
@tomcat - great idea, but I can't see happening! No doubt all partners will know the potential and I can't see any wool being pulled over our BoD's eyes on this one: unlike our Yangibana tenements where HAS could have mined elsewhere, we have the 100% Ganfeng tenement completely surrounded with our 30% JV holdings, so as if they want to expand from the 17.5/35ktpa DFS plan, as recently announced, it's like how @Kiran put it: "so you would see our area come forward in the mine plan and therefore would have a far higher value because the NPV would increase."
Exciting times ahead for sure! :-)))
Ob.
if we are doing a premature exit anytime soon… based on ganfeng’s recent transaction… we’d be looking at our scoping study… $2bn npv x 80% x 30% = $480m / 172,232,008 shares in issue… $2.78… uplift that for the increase in the lithium price from $6.5/kg to $16/kg lce… maybe we should be doing an updated scoping study at $16/kg… in preparation for any impending sale current valuation…
@EV Bull re the potential is there …
I invested in REM initially for the Li in Sonora as no doubt many others did. Given all the indications that the value of Li is very likely to remain high up to 2030 I’d be keen to sell part of a JV and use some of the funds to explore and prove up other JV areas. Selling out in toto when the potential is there doesn’t make longterm sense, especially given the global need to explore and bring more supplies online.
I agree, £5 is more realistic …. £50 would need a substantial increase in resource.
The potential is there,
5p back then would be £5 now, certainly not beyond the realms of possibility.
Observer’s valuation
https://www.reddit.com/r/CadenceMinerals/comments/vpr5w7/due_diligence_lsekdnc_cadence_minerals_asset/
@Jimb2 The famous, now infamous, 5p party drew in many new investors to REM. The prospect of a deal with Tesla was like the proverbial rocket fuel to REM’s prospects.
That was then …. so where are we now some 8yrs later?
Research and logic suggests that if the original licences still being honoured by the Mexican govt then Ganfeng are very likely to supply Tesla from Sonora. And it’s not just Ganfeng who are interested, looks like CATL will be scouting for Li supplies too in Mexico for both Tesla and Ford.
https://gulfnews.com/business/energy/teslas-chinese-battery-maker-catl-checking-out-factory-sites-in-mexico-1.1658128584527
Given the size of the area, over 100,000 Ha, and the interests from other battery manufacturers, the prospect of a 5p party (now a £50 party) isn’t so unrealistic after all! :-))
I would hate to think some have missed out on this:
https://www.tribuna.com.mx/sonora/2022/8/12/el-gobierno-enreda-explotacion-del-litio-en-sonora-hay-poca-claridad-en-proyecto-de-amlo-304635.html
Despite the rigidity that the nationalization of the deposits occurs yes or yes, López Obrador, after analyzing the international legal scope that it would entail, ******no longer sees the need to dispute the concessions already granted, which lightens the pressure of the market.*****"If the concessions speak of lithium, because if they are not concessions granted for the exploitation of lithium, they cannot be recognized. Those that were granted for that purpose, are recognized," he accepted.
$onora good to go by the looks of things,
On a wider note:
https://www.bnamericas.com/en/news/mexico-tries-to-nip-usmca-trade-dispute-in-the-bud
All's falling into place any doubts or concerns with $onora are fading out of existence
A reminder when I bought in 8 years ago:
5p Party for a Tesla deal for $6,000/t -- should that be 50p party with lithium at nearer $60,000 - oh then consolidation - 100/1 blimey £50 party
Experts saying high prices for the remainder of the decade.
@MBW now look at what you've got me thinking, was that intentional?
£50 party