Utilico Insights - Jacqueline Broers assesses why Vietnam could be the darling of Asia for investors. Watch the full video here.
The terms rather than who will be the big determinatior on the price reaction I reckon. To get 70 to 100m up front for a 500k supply dealwill mean either a decent discount to spot or a bargain fixed price for the offtaker, or a mix? How much will have a big impact on Atlantic's earnings over the 5 years of the deal.
I hope a decent amount will have a floor price that gives profit.
Looking forward
Https://youtu.be/dCorcsoYqyE?si=vuEmx-BbZKS6xVkI
Inciteful listen.
Https://youtu.be/i5moqnhHSE8?si=u55rF6eqT_Hoosb2
From 36 20 for Piedmont and some on Ewoyaa. Opinion: present LCE pricing makes Tennessee difficult....but also it is to rise.
Bit of a trend?
https://www.yicaiglobal.com/news/chinas-lithium-carbonate-futures-surge-as-another-environmental-storm-looms
Piedmont have also said they are to apply for US gov finance for Ewoyaa others have already had awards for Africa projects. I see minimal concern re finding the cash there but there is some if sc6 pricing remains very depressed through to Piedmont's FID. They would have to think carefully whether to hold off for better times. Building Tennessee costs 5x more.
Can't see it but one has the worry.
FMU:
*ESG means nothing in China unless the West curtails imports. They could but they haven't apart from duties.
*DSO does go from Africa particularly Zimbabwe but is not in large enough volume to have a big price depressing impact.
*Chinese lepidolite does come out from the western desert and little doubt it is being subsidised by battery cos but production is slow in winter and I suspect is more talk than reality now.
Last day of Luna Holiday.restocking?
Rapidly growing market
https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/electric-power/021524-solar-battery-storage-to-dominate-new-electricity-generation-in-2024-eia
https://auroraer.com/insight/battery-markets-gb-italy-and-the-ireland-i-sem-lead-the-way-in-europe/
I somehow doubt they will walk (watch ALL crash to sub 5p then Assore offer 6 if they do) because for around a total outlay of some 170m they get 1.75mt of sc6eq...... 40.5% of Ewoyaa's value and 40.5% of Ewoyaa's distributions and uh 5% of a (yes it might well be worth 150p by then) Atlantic.
Missed owt?
ATB
40.5%
Ref RNS 31/8/21
All (well 45.5%) or nothing for Piedmont.
Certainly not price impacting when there is 12m+ to sort it out (if there is anything to sort that is) before they are due to spend that cash.
Holding for the build.
GLA
This was in the 24/1 RNS:
"In addition to the US$5m Subscription, and subject to the Company reaching a binding agreement with MIIF for its proposed investment in the Ghana Portfolio, MIIF to invest a further US$27.9m in the Company's Ghanaian subsidiaries to acquire a 6% contributing interest in the Company's Ghana Portfolio, inclusive of the Project, expected to complete in the coming months"
With present structure Piedmont are the first big capex spenders. FID early '25 according to them.
N2S realistically I have to agree on present fair value, but only in small part from what you flag up.
Though Atlantic have consistently suggested a bit earlier Piedmont are now firmly stating 2025 for the FID and construction commencing. Proactive AU, Phillips:
"The project, expected to commence construction in 2025, promises high returns with its low capital and operational expenditure profile.
“We expect 2024 project spending to be minimal with a focus on advancing the project through the environmental permitting and approvals processes to prepare for an ultimate investment decision in 2025,” Phillips said.
Piedmont is exploring non-dilutive financing options to support its share of the project’s capital, ensuring minimal impact on shareholder value."
https://www.proactiveinvestors.com.au/companies/news/1040359/piedmont-lithium-targeting-cost-efficient-lithium-mining-on-two-continents-with-nal-and-ewoyaa-investments-1040359.html
But also they have now openly stated that they are to seek non dilutive debt/grant finance for Ewoyaa.
This clearly marks that the build start is a year out. With the agreed Atlantic-Piedmont deal build capex comes from the partner first.... (you know all this but quite a few new to here don't appear to ;-) ).. There is plenty of time for all the other issues to get resolved. Those I expect do depress the price somewhat but I think it's the present macro situation causing the most pain.
Perhaps difficult for those hoping for fast bucks from ALL. Only left with Assore going hostile to hang on to. No hint from Peidmont on that.
We'll see.
ATB.
Debt financing plan for Ewoyaa
"Piedmont expects to submit a formal application for the Ewoyaa project debt financing later this quarter to the U.S. International Development Finance Corporation"
Https://www.businesswire.com/news/home/20240206121354/en/Piedmont-Lithium-Provides-Corporate-Update
Mike your 12.50. Yes, this is what I recall.
So say 300kt forward delivery to raise say $80m today. Reckon Atlantic would want it priced via a market price mechanism (with maybe a floor) and the partner would want a discount since they have made a forward payment?
What size total discount over the deal duration? The few deals I've seen at this advanced project stage have been around 1 1/2 to 2x the up front payment, so say $140m. On 300kt delivered some $470/t.
This would be little problem with spod at their DFS modeled price but but at today's prices of around 900 and say 2/3rds of the other production going at market price they would be struggling to achieve positive cash flow in those first years.
This miserable pricing must break soon!
On YT now
https://youtu.be/nlysbSpJeSo?si=RU14tPuNjaYrFWTc
Nice shirts!