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Very important point Ctw - and they should look carefully at point (i) in particular:
Right of Pre-Emption
A Geomet Shareholder may transfer all (but not some only) of their Geomet Shares (together with all but not some only of Shareholder Loans provided to it) to any third party purchaser.
Notwithstanding any other term of the SHA, neither Geomet Shareholder may effect a transfer of any Geomet Shares and/or Shareholder Loans to any third party purchaser until the earlier of:
(i) the Construction Decision; and
(ii) the date falling on the third (3rd) anniversary of the Completion Date.
Customary pre-emption process with a ninety (90) Business Day offer period.
If the offer is not accepted within the offer period, the selling Geomet Shareholder may sell its Geomet Shares to a third party purchaser at a price not less than the price offered to the other Geomet Shareholder and on terms not better for the Third Party Purchaser than the terms offered to the other Geomet Shareholder.
Jonesy - this is consistent with their other presentation in the same month: "Construction decision planned for the end of 2023; start of production at 2026; full production since 2028" https://drive.google.com/file/d/1b7uNSe7hKZT-BoQm4XfLHtLvQ6PSGVw3/view?usp=sharing
Dave - well spotted, confusing Geomet and CEZ...
You're looking at an aggregated number on a number of aggregated activities - we can't infer anything from those forecasts. They're saying that these chain of battery related activities won't be very profitable for years - Geomet's profitability could be supporting unprofitable activities downstream.
Bloomberg: https://www.bloomberg.com/news/articles/2022-07-15/vw-s-battery-business-faces-supply-chain-hurdles-in-road-to-ipo
Volkswagen AG’s newly formed battery business is working to overcome supply-chain headwinds as it ramps up production and prepares for an initial public offering.
PowerCo, which bundles the carmaker’s global battery efforts, is trying to secure raw materials amid surging prices and logistics issues, according to the unit’s Chief Financial Officer Kai Alexander Mueller. VW plans to partner with Umicore SA to source cathode materials, is exploring working with Robert Bosch GmbH for machinery and agreed to offtake battery-grade lithium hydroxide from miner Vulcan Energy Resources.
“The supply chain for our business simply doesn’t exist today,” Mueller said in an interview. “What is important is working with suppliers to scale this industry.”
Agreed - interesting excerpt: https://youtu.be/PUPIMP42Flk?t=1173 - CEZ would come under this.
"Embrace partners with creative solutions instead of looking for government loans and grants. OEMs need the product - they should be footing a portion of the bill. We looked at the 500 billion plus that's out there in the market. When you consider the only about 20 to 30 billion dollars needed for lithium to actually increase supply over time, this is a rounding error, and at the project level every OEM should be proud to be associated with public producers that are executing on time and helping them get to the end stage we've seen it in other materials we think that this is the next thing for the lithium market.
Ant, here’s your answer (apparently): https://www.asktraders.com/analysis/is-european-metals-emh-suffering-from-the-tin-price/
https://www.bnnbloomberg.ca/one-mine-auction-draws-3-448-bids-amid-scramble-for-lithium-1.1769399.amp.html
An auction for a controlling stake in a Chinese lithium mine has garnered 3,448 bids, underscoring the scramble to secure the battery metal that’s key to the clean-energy transition.
The heated bidding war, which concluded on Saturday, was joined by 21 participants, while over 980,000 people watched online throughout the five-day event.
“We believe the auction price indicates a bullish Chinese primary market for future lithium prices as well as the strategic importance of Sichuan spodumene assets,” Daiwa Capital Markets’ analysts Dennis Ip and Leo Ho said in a note.
https://www.volkswagen-newsroom.com/en/press-releases/mission-started-the-management-team-of-the-new-battery-company-is-in-place-7975
The board will begin work on July 1 and oversee all activities along the battery value chain – from the procurement and processing of raw materials to the development of the Volkswagen unit cell and the management of the company's initial six gigafactories.
tsibis - on what valuation? As it says in the article: "It’s probably most important for equity investors who, along with a DCF, may also utilise a current year or one year forward EV/EBITDA or PE ratio approach for valuation purposes. How expensive a stock looks compared to other commodities/materials or sectors is thus very important in the decision making process."
FWIW - my long-term average price is $26,000
Worth reading - How to Forecast Battery Materials Prices in a Supercycle: https://www.batterymaterialsreview.com/ourblogs/how-to-forecast-prices-in-a-supercycle/
TLDR; Prices will plateau here for 6-7 years then fall to a higher normal. The long-term price will be higher but it might not be double the $17k in the PFS. DFS is the expected average over the lifetime of the mine.
And of course at the rate we’re going, we won’t see much production at the plateau prices…
Agreed ColinH - if you listen to Joe Lowry's podcasts, he advises investors to ignore all the companies loudly announcing stuff and concentrate on the one's who are diligently getting on with making things happen - which is the category we fall into.
Interesting points from slide 13:
**EIA submitted for the mining part of the project** (EIA notification for processing will be submitted in the second half of 2022). We are currently working on individual studies resulting from the EIA investigation
- The EIA documentation will be prepared for the whole project and submitted 22/23 and will take into account both conclusions of the investigation procedure
- A proposal for updating the Principles of Spatial Development of the Ústí nad Labem Region with a variant solution of transport has been prepared and work has begun on other parts of the changes to the zoning plans of the affected municipalities (Dubí and its surroundings).
- The process of permitting the mine drainage and preparatory work on other permits has begun
Mining area
- Work on the final feasibility study (DFS) for the mining section has progressed to the second half. The supplier is BARA Consulting, which has extensive experience with global projects of a similar type. **The DFS will be completed in 12/2022** and will answer the questions of the exact mining procedure and schedule, the type of equipment, the number of employees required, and will also serve as a key basis for the mining permit.
Translated version of the presentation: https://drive.google.com/file/d/1b7uNSe7hKZT-BoQm4XfLHtLvQ6PSGVw3/view?usp=sharing
It’s posturing - CEZ will be looking for incentives from the EU to bring the timelines forward. If they get additional funding or favourable tax breaks, etc then they could looking into making the project happen faster.
Private Equity are a self-serving bunch of too clever by half dealmakers - I see they're invested in Talon and Nouveau Monde. Good luck getting something, anything back...
And ironically, having CEZ as a bedfellow prevents EMH management shafting EMH shareholders too...
I saw that - shareholders cheated. Who made the money?
"Nemaska is a fully integrated asset with 34,000 metric tons of nameplate capacity of battery-grade lithium hydroxide with first production in 2025."
Livent's purchase is worth $370m for 8,500ktpa of future capacity.
At a value of $43,500 per thousand tons of annual production, this suggests an estimated value of EMH's 49% of Cinovec at US$3.37 ... around £2.50-2.70 depending on how weak the pound is.
https://ir.livent.com/news/news-details/2022/Livent-Announces-Agreement-to-Double-its-Ownership-Stake-in-Nemaska-Lithium-to-50-Percent/default.aspx
Opex number includes tin credits at the price from the PFS. Share price isn't influenced by tin price that much.
Variations in Lithium price contribute to the output share price at a level of nearly twice that of capex variations and seven times opex costs.