The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Where is the sense in this share?
I am reading an article on the FT which is all about lithium demand going to go through the roof in the next decade and this company is promising to be going into production at exactly the movement demand picks up again, and yet it is stuck in a rut.
If what Peter S is promising does come true, and existing shareholders are not diluted to nothing, then we should be all ok I guess. It's just frustrating to have a supposedly world class Lithium deposit, poised to fulfil insatiable future demand with a MCAP of 50 mil. Despite the fact that it has 30 mil in cash, 125 mil debt facility and three cornerstone investors, one of which is f*******g Ganfeng!! I mean how are people not gobbling these shares up at only 2 pence higher price to what a world leader in lithium production paid (25 p) It seems absolute madness.
Long Term holder here, so bound to bias.
Hi Bull. My take is that there are big questions still unanswered, so restraining the SP.
Will Ganfeng use their undoubted muscle to gain effective control of the deposit? It would be surprising if they didn't, if you are in a powerful position then you don't squander it. Is that a good or bad thing for BCN shareholders? Well, bad in that we lose control but good as (provided lithium demand/price behaves itself) the Ganfeng involvement will pretty much guarantee success and alleviate the funding cost problem for the mine.
What we do know about Ganfeng is they have no interest in taking over companies in foreign territories, but they do like to have control (50%). That leaves BCN in a comfortable position - 50% of a massive resource is still a huge amount. It protects BCN from cheap takeover's which was always my worry. Peter Secker would bite someones hand off for 150m, Ganfeng won't be interested as it's about the wider picture for them.
Price wise I agree with johnpwh - the big question of 'is clay commercial and scaleable without production issues' looms heavily over us. Personally, I'm happy with the pilot plant and Ganfeng's backing, however more serious investors than myself will always follow the trend. The rhetoric in the market is clay doesn't work and we are stuck for now. Secondly is of course finance - are we in for another cheap 25p give-away? Sensible money would say buy in after financing is agreed, that's where explorers make the gains.
All things considered I think BCN is in a great place, it's a definite hold and the rewards will come. Ganfeng will get this to production and prices like Lithium America's won't be too far away.
Thanks for your responses.
In regards to the 'question of clay' you mentioned, I just can't believe that there is any doubt given that they have built a pilot plant and companies are committed to taking the product off BCN's hands.
One worry I had a few months ago was that Ganfeng were building a position in order to prevent the mine from coming online, essentially controlling the supply by constraining it, which would help prices. But it was a worst case fear, and I hope baseless.
It doesn't seem like they have a history of doing this, and it also seems that there will be ample demand for lithium even if supplies increase massively in three years time.
As you say, the financing appears to be the greatest barrier to a sustained price increase, and with any luck this will be resolved in the coming months. Personally I would be happy with more dilution if in five years time I am receiving dividends that I can be sure of for many years to come.
I have no crystal ball, but the more I read everything is lining up for a lithium revival driven by a need to reduce pollution in our cities and provide the storage for the renewals sector.
Hopefully we'll all be enjoying a rosier picture of our investment by year end. Fingers crossed for all the LTH here
"One worry I had a few months ago was that Ganfeng were building a position in order to prevent the mine from coming online, essentially controlling the supply by constraining it, which would help prices. But it was a worst case fear, and I hope baseless"
Even with BCN Ganfeng would only be supplying a small % of the worlds supply/demand. Absolutely no logic in not bringing this into production. If you do so other miners would just jump in. Besides even with BCN output there is still expected to be s shortfall in supply.
A logical worry by Bull but I agree with you 'r'. Ganfeng wont invest many millions to supress production and aid its competitors just as much as it does itself.