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Good analysis again, and the important point is that even if you majorly change the assumptions you still end up with a sp way ahead of where we are now.
I am hoping that a) there will be a gigafactory and offtake announcement in early October (as per the Babis/Diess meeting) and b) following on from this WHIreland will do an update that better reflects all current facts.
Czech election is 8th October. Would expect to see progress moving on shortly after
News may be near it seems :
https://twitter.com/EITRawMaterials/status/1438071837854998531/photo/1
Convo on HC
BelgianBert : ?"Personally I believe CEZ will absorb the entire lithium supply. Don't forget they are the ones to decide where the lithium goes."
=> Do you think we'll get a fair ooftake-price / contracts ? What will happen when they have to raise capital to start the mining, major dilution?
I think EMH has a larger political risk than the other lithium-projects.. Hence the smaller rally/cap compared to other booming lithium stocks. Yet holding a large stake of my portfolio in this one because of the obvious opportities to tap the European Green Deal-Trillions.
ME : Bert , Cez WILL NOT absord all the Li supply , Very Very simple . Tesla will more than likely be the first offtake , their gig factory will start B4 any one elses . Minimum prices are currently being negotiated and would be surprised if they are under $15,000 a tonne . When it comes to dilution , we may not have as much as you think , any real forward contract for offtake will have a prepayment element to it . ie 8,000 tonnes pa 3 year contract with first year at $15,000 USD would give Geomet $120 mil toward their capex , on top of the $100 mil or so from the Euro Commission . Given EMH has already stated that financing with soft loans is already in the bag for 70% of Capex , Geomet may end up with suffient funds whereby EMH may not even need to raise for Capex at all , particularly if we can get two offtakes under the same conditions . Happy days to come .
& we all know what happens when Tesla sign offtakes . . . . price rocket!
example = ''Piedmont Lithium, an Australia-based mining company, surged as much as 395% on Monday after it signed a five-year sales agreement with Tesla''
It does feel possible that CEZ taking 50% of the project could be THE equity element of EMH's CapEx contribution, meaning EMH only need contribute debt to the project. No (further!) large dilution, which often holds back a share on anticipation of it, necessary, as the hit has already been taken. Just my opinion of course...
Not sure what you are saying there Ob , EMH need to come up with 15% of the capex raise after Geomet secures soft loan funding of 70% , not sure if EMH would be able to raise Loans for all or part of their 15 % . Having said that the way I see it , I am assuming to be conservative 1 Bill USD capex allowing for increased production , inflation and the like from our PFS
If soft loans are 70% Cez and EMH need to find $300 Mil . Now I see that $300 mil coming from two offtakes and Euro Free cash .
8,000 tonnes of Li at $15,00 a tonne offtaker one Ie $120 Mil
8,000 tonnes of Li at $15,00 a tonne offtaker two Ie $120 Mil
and Euro $100 mil conversion to USD is $118 mil
Total $358 mil Wallah soft loans free cash . No cash required by EMH .
Finger, you forget last week article about 1.25 B czech croawn (60 m) from the European recovery fund.
It is not linked to the European battery Alliance grant and soft loan.
So together with offtake prepayment there is plenty of potential cash available.
Agreed Arnaud not sure if that fund would support Geomet , bit too close to home , similar to Storksnest saga . I would suspect the Gov would get hung and quartered funding a project partly owned by them .
2 Gigs coming to Czech .
https://automix.denik.cz/magazin/tovarna-na-bateriove-clanky-v-cesku-by-mohla-zachranit-automobilovy-prumysl-2021.html
In europe, each country has a dedicated recovery fund that need’s to ush for green transition.
Each country provide project they will support with the european fund and it is exactly what Chech Gov did with the 11 selected project.
- Including 1.25 B check Crown ($60m) for giga
- another 1.25 B check crown for Geomet.
This money has clearly been traced to geomet and Cez. It still needs to be passed by authorities but it is in the pipeline.
A battery cell factory in the Czech Republic could save the automotive industry:
If at least one gigafactory were to be established in the Czech Republic, ie a production plant for the production of cells for electric car batteries, the entire Czech economy would benefit from this, according to an expert study.
If the Czech Republic wants to avoid the unemployment problems that a change in the production program will bring to some companies in the automotive industry in connection with the transition to electromobility, up to two battery factories should be established in our territory in the relatively short term.
This follows from the conclusions of an expert study by the consulting company Deloitte. On the contrary, this could create thousands of new jobs and the state, municipalities and regions would receive over fifty billion crowns in taxes over eight years.
According to current assumptions, 11-16 battery factories will be needed in 2030 to meet the need to produce batteries for electric vehicles, and another 15 to 19 years later.
According to Deloitte, the project makes sense even when lithium, which is needed for batteries, is not mined in the Ore Mountains. However, this will be even better when the domestic raw material is involved in the entire production chain from mining, through the production of the battery to its incorporation into the exported complete electric car.
The project being prepared by CEZ in the area of ??the former Prunérov lignite power plant in the Ústí nad Labem Region is currently relatively close to implementation. If the plan is approved by the Supervisory Board in November, the German automobile concern Volkswagen could also invest in it. Logically, the batteries from Prunérov would then be used for Škoda electric cars. So for both the current Enyaq type and the electrical equivalent of the current Octavia, there is one other smaller electric car.
At present, however, unnamed investors are interested in building another gigafactory. This time, an industrial zone in the Sokolovská region is possible.
The estimated annual capacity of the Prunner gigafactory is 40 GWh, which is in line with Volkswagen's plans to build six such large battery factories by 2030. Construction could begin in about two years and the first batteries should start coming off production lines in in 2026.
Thanks for clarification Arnaud , did see the article still have some reservations , but the $60 mil USD would be very welcome . Golly maybe Geomet will share this between Cez and then EMH could do a buy back LOL . We are rolling in Cash $418 million USD now . And our old PFS was capex of $483 Mil
Brinsden sees no end in sight to lithium run
https://www.resourcesrisingstars.com.au/news-article/brinsden-sees-no-end-sight-lithium-run
Indian electric vehicle firms running low on Lithium-ion batteries
https://auto.economictimes.indiatimes.com/news/auto-components/indian-electric-vehicle-firms-running-low-on-lithium-ion-batteries/87216936
Electrified cars hit almost a fifth of EU Q3 vehicle sales
https://auto.economictimes.indiatimes.com/news/industry/electrified-cars-hit-almost-a-fifth-of-eu-q3-vehicle-sales/87206205
For what it's worth, I think there will be regions where hydrogen vehicles will take off. Largely in the UK, probably Wales and Scotland (windier places might decide to use hydrogen, particularly for industrial and farm vehicles).
Electric cars, trains and eScooters will dominate.
Rio Tinto says 60 Jadar mines wouldn’t fill looming lithium gap
AND EMH WILL BE ONE OF THEM
https://www.mining.com/rio-tinto-says-60-jadar-mines-wouldnt-fill-looming-lithium-gap/
Nice!
===[
Indicative offers for battery-grade lithium hydroxide for forward November loading and delivery cargoes were pegged at $29,000-$30,000/mt, supporting the bullish market outlook.
]===
Easy to see why off take negotiations will take longer!
Not sure if this has been posted but f/i, Next generation lithium batteries:
https://www.autoevolution.com/news/solid-power-wins-iarpa-contract-to-develop-new-fes2-cell-with-up-to-500-wh-kg-170744.html
https://www.iarpa.gov/index.php/research-programs/resilience
https://www.iarpa.gov/images/PropsersDayPDFs/RESILIENCE/Xerion_Capabilities_Statement.pdf
"The US Military purchases in excess of 10 million cells per year and we believe
that we are in the ideal position to service this market. Our current focus on LCO is due to its
continued dominance in several of the identified target markets from both a specific energy and
cycle life standpoint. Based on these results and our analysis, the XABC Dayton, OH facility is
being configured to produce four products: Cobalt metal, active battery material powder,
electrodes for lithium-ion battery production, and lithium-ion batteries for the above markets.
Secondarily, XABC is in discussions with a partner to produce a product for the automotive
market. We anticipate that this will be accomplished through a joint venture (JV) with
considerable access to the raw materials used in the production of lithium-ion batteries."
UK’s first ‘gigafactory’ set for huge expansion
https://www.ft.com/content/e02b9c29-85c7-4e61-ac18-49a64d7beb1d
100,000 Tesla order from Hertz
Tesla hits $US1 trillion on Hertz bulk electric vehicle order, pushing Wall Street higher
https://www.abc.net.au/news/2021-10-26/asx-tesla-hertz-wall-street-markets/100567976
Yes big news, will top up today, I bought a little early but very happy to average down a little.