Member Info for gsdsitgs

@onsolidground I'd like to believe what you write but the press release posted below (from gov.ua and on Bloomberg) is pretty confusing - my question is whether it's because the writer has no idea about the company structure or because the state wants to simply steal the mine.

The press release says "49.5 % ownership of the Poltava JSC" which should be seized/nationalized which is slightly different than 50.1% of Zhevago's shares in Ferrexpo. The worst case (according to the press release) would actually be stealing part of the mine and cutting revenue for FXPO shareholders by 30% or more.

The "best" case would be that the Zhevago share is nationalized/seized and FXPO becoming a state-controlled company. Which is a mixed bag, I'd expect higher dividends and easier approval of future projects but also worse management and bad investments.

Before anything is approved and constructed in Europe, China may as well switch from lithium to sodium batteries...

There are some documents available as a result of these assessments

https://portal.cenia.cz/eiasea/detail/EIA_MZP506?lang=en

You can download the documents and go through them. Half of the documents' contents (from 2021) are basically about a specific bird (black grouse) and the fact that the bird does not like to stay in the area of the planned mine.

Yes, Babis is a populist (as well as a liar, sociopath, tax evader, tried to convince everyone his son is mentally ill, possibly caused multiple suicides of his business competitors he destroyed etc.), however for EMH he wasn't that bad. He moved the project forward, the 51%-49% joint venture probably was necessary, otherwise the mine would be stuck in an undefined state forever. His minister Havlicek actively supported the project.

So with old government the project had a lot of support, now everything is unknown and a lot of negotiations can start over again... Not necessarily good, I would say neutral to very slightly positive.

The real fight against the project came from the opposition which now won the elections. There are two main coalitions -
1) Spolu (center-right, mostly conservative) many their members expressed doubts about the project and whether it makes sense
2) Pirstan (Pirates and Mayors) - this one was probably the most toxic for the project, Pirates didn't hate the project but they wanted to increase several taxes - increase extraction tax 10 times, increase income tax by at least 5% etc. Pirates formed a coalition with Mayors (progressive center) and it was expected that Pirates will get a lot of votes and as a bonus they will condescendingly save the Mayors because otherwise they wouldn't reach the 5% election threshold. However, a very funny thing happened, the coalition got 37 seats but thanks to preference voting Mayors have 33 seats and Pirates only 4 (out of 200-seat parliament). So Pirates are irrelevant and not a problem anymore.

Another news from today is that the president is hospitalized, probably due to his life long alcohol abuse. I wouldn't be surprised if he actually dies within a few weeks. The president has good relationship with the CEO of CEZ and there are rumours the CEO was protected by him (CEZ is 70% state owned) despite his bad performance and rumours of Russian influence .

Tomorrow, the current prime minister is meeting with the CEO of Volkswagen (which owns Skoda and plans gigafactories in the region) as well. So a lot of events unfolding.

The election results aren't bad but they aren't good either. Basically everything can and will change (CEZ CEO, minister of industry, prime minister, president), don't take anything for granted, political programmes are one thing and real actions another.

I haven't seen this form before but 50 million seems to be some kind of a magic number used in other listings as well.

For example:
Tata Consultancy - 50 million ADRs at $0.05 (https://seekingalpha.com/filing/1590050)
Tencent - 50 million ADRs at $0.05 (https://sec.report/Document/0001019155-18-000354/)

My logic is that to actually create the ADR, Deutche Bank needs to own the 20 Australian shares. So you are allowed to create 50 million ADRs but to actually do that, you'd need to buy 1 billion shares and that many shares do not exist.

It is not an intentional targeted attack of the state on rubidium lol. There is certain formula (with a constant) of how high the tax should be (if you want to get into details: https://www.epi.sk/zzcr/1988-44#cast8)
Basically the result is that it can be ridiculously high for some ores/metals and ridiculously low for others.

So it isn't a good idea to try mining of gold or uranium or rubidium in the country but for lithium the tax (right now) is pretty low. Which may not last very long, winning party of the autumn election already said they want to increase such taxes up to 10 times (https://iuhli.cz/pirat-nici-tezare-ti-se-bouri/).

It doesn't sound like rubidium is particularly unique or useful - I imagine the situation akin to PGMs which can be often substituted in their usage. Sure, you could use rubidium for something but in that case you can probably use lithium as well.

Two aspects related to the rubidium you mentioned:

- the demand is extremely low, often just a few hundred KILOS PER YEAR WORLDWIDE, not tonnes, not in Europe. Kilos in the entire world.
- the mineral extraction tax in the locality (CZ, not sure about DE) for this specific metal is higher than the cost of rubidium itself. So it is effectively 100%+ tax on rubidium while for lithium and tin the tax is in the lower single digits (which may increase 3-10x if the Pirate party wins election this autumn).

It's always a trade-off. Less chemicals needed and used -> higher energy consumption. Lower energy consumption -> more chemicals needed. Afaik what SMS wants to use in their feasiblity study is a proven method that works. Then you have one Czech professor that wants to try out his method with less chemicals.

"Time in the kiln" doesn't really matter that much imho, what really matters is electricity consuption and how fast this theoretical method can be up and running. I'm pretty sure both methods are possible, time is the real question. Noone probably wants the project to be delayed by a year or more because of some experiment.

Do you know who is the market maker in Germany?

https://i.imgur.com/0BafdTO.jpg

With the new ADR listing in US (1 ADR = 20 stocks) that will decrease the available float even more. It would be interesting to see what % of shares are available in Australia / UK / US / Germany.

Thinly traded stock with low liquidity and confusing listings apparently. Someone tried to buy 100K shares on FWB (Frankfurt). Probably wouldn't be noticed if someone bought it on ASX.

The average volume in Germany is 6K/day, what happens when you try to buy 100K on such a stock?

I tried buying there and made a 10% wick up as well. I can see it on the chart when I look 1 month ago lol. I'm not trading this in Germany ever again.

Crushing will take place on the surface. Ore (up to 20cm pieces) will be transported from the mine to the surface facility. There it will be crushed to 1mm pieces, magnetically separated and chemically processed. Then this semi-final product should be transported by a slurry line to a processing plant where final product should be created.

I have no idea who this guy is and what is the goal of the video. If I had to guess, the location where he's standing is near 50.72241047322696, 13.77703976476548 which is RSJ (rsj dot com), there are tailings from former mining which contain some lithium. If someone took some "samples" then I wonder why you'd need "5 lorries" but in that case it must have been RSJ. If it was EMH or Geomet they were probably stealing dirt from someone else's property lol.

If I were EMH (or CEZ) what exactly would be my motivation to buy shares from Ganfeng? Of course there are synergies if EMH and ZNWD merged, of course Li demand is expected to increase. However, my understanding is that EMH doesn't really need ZNWD for anything - larger part of the resource is on CZ side, tax incentives and dotations will also be on CZ side, there are no Chinese involved on the CZ side, gigafactory on CZ side as well.

Thanks for the info about Solarworld being defunct, I haven't studies that but this situation definitely doesn't sound bad.

Dumbpunter is right about the deal rejection possibility (I disagree with his other opinions and claims though), if CEZ dislikes something, they can easily stop basically anything. There is zero change EMH will be able to do some independent, behind the curtain, offtake agreements or separate deals.

Geomet has five directors: https://or.justice.cz/ias/ui/rejstrik-firma.vysledky?subjektId=362777&typ=PLATNY you can easily count how many of them are actually from EMH. It is one (two if you count Cadence). If there is disagreement, this simple arithmetics of 1<4 or 2<3 means CEZ is the big guy and will always have the last word.

Of course it's nice to hear such things, perhaps you'll get some confirmation bias as well. Okay, the hydroxide (and carbonate as well) price doubles. Let's consider that an undisputable fact. How long will that price last? A year, two years, five?

NPV for such projects is calculated using future discounted cash flows, if the high prices last only a year or two, most of the cashflow won't be impacted so there definitely won't be 400% upside but perhaps 50% or 100%. Why wouldn't high prices last? Well, because Australian and Chilean producers can scale very easily, it is the same story as with uranium or silver, commodity prices can stay as ridiculously low prices longer than you'd imagine.

I'm not trying to be extremely negative, I'm also invested in the company! What I'm trying to do is be the devil's advocate (devil = current valuation is fair given what we know right now).

Today's volume on the LSE was less than 90k. Noone seems to care. The ASX listing id more alive but also mostly driven by traders.

There was a nice gap up last week so I wouldn't be surprised if there's an announcement before the end of June, the stock makes another break above the ATH followed by a burst of 3-5 rising days - after which it consolidates again.

Look at how the stock behaved in Q3 2016 - Q1 2017 and don't be surprised if it behaves exactly like that again. Only the price will be higher.

Not just one gigafactory but support, tax breaks and incentives for TWO gigafactories. That is completely BRUTAL.

The two suggested locations should be Prunérov (Ústí region) and near Sokolov (Karlovy Vary region). The former is basically a requirement of the local politicians - they want the factory as a condition to support EMH/Cinovec, so that lithium is processed in the region. The latter could be a nice bonus for the neighbouring region but the real question is who plans that, perhaps RSJ?

I wouldn't take the second one for granted but even announcement of one gigafactory this month will be nice.

The Mining Authority issued a building permit for the construction of a lithium mining line in Horní Slavkov
Source: https://ekonomickydenik.cz/bansky-urad-vydal-stavebni-povoleni-k-vystavbe-linky-na-tezbu-lithia-v-hornim-slavkove/

Different resource but similar to the other part of Cinovec (tailings bought by RSJ). Also you can imagine some synergies in the region in case of a gigafactory.

___________________________
Lithium mining from the remains of mining activities in West Bohemian Horní Slavkov is definitely in decline. And it could start in less than two years. The District Office for the Karlovy Vary Region issued a building permit to Sanaka Industry for the construction of a separation line. This is crucial for the extraction of lithium mica from Hornoslavkov tailings.

The building permit states that the construction will be completed within two years from the date of entry into force of this decision.

What will mining practically look like? The mined tailings, ie lithium sand, will be transported to a drum melter, where they will be mixed with process water. Subsequently, it will be separated by a two-stage magnetic separation into a concentrate of lithium mica and sand. The mica concentrate will then be dewatered, packaged and stored at the permitted mining site.

Sorry, made a typo, means to say the VW boss and the Czechs will awkwardly elbow bump instead of shaking hands.

After that they will announce that they agreed on the possibility they will agree on a deal in the future - but only if it makes economical sense and if the permission is granted. So nothing we didn't know before.

Hopefully the stock price will react, of course it can easily double within 3-5 days after a breakout. If you're a trader, you can prepare accordingly, buy on the rumour, sell on the news. If you're an investor you can just hope you won't get f***ed in the **s by the politicans and by CEZ.

I'm not sure what exactly is supposed to happen this summer? The VW boss will make a trip to Czechia, he'll shake hands with the CEO of CEZ and perhaps the minister of industry. Can they really agree on some deal? Not really, as long as mining permission is not granted and definite feasibiltiy study is not done.

Preliminary EIA was submitted on May 7th, then everyone had a one month period to submit complaints about the project. As far as I can tell, there were 20 suggestions (10 of them complaints) made during the month (May 7-June 7).

The current situation is that the local municipality (Dubi, Cinovec) supports the project; the region (Usti) also supports the project as long as there will be a battery factory in the region (Prunerov). Minister of industry also supports the project.

There is one party that dislikes the project and opposes it, the neighbouring town of Krupka. Just a random boring place noone cares about, however the local politicians hate it since the beginning. The arguments they make are ridiculous - e.g. they were afraid they would be removed from UNESCO list if the mine was created (which is funny because they were added to UNESCO list THANKS to mining landscape and industrial history). Then they had these weird complaints against drilling - they were afraid of "huge machines making 500 meter holes". I wonder if they ever saw a drilling machine and if they ever visited the location. My guess is if they were standing 50 meters away from it in the forest, they wouldn't even notice it.

Anyways, the point is that this town (Krupka) can try to block the project. None of it is in their area but they can still try.

Then there is this random black bird which likes to mate in the area, usually in meadows and not in the forest but it caused a wind farm project nearby to be rejected: https://iuhli.cz/vetrne-plany-miliardare-hati-tetrivek/ and there are some other things mentioned in the EIA (surprisingly, there are ants and common lizards living in the forest...).

These complaints have to be addressed in the next 45 days, then the ministry has more time before approval of EIA (end of 2021 or end of 2022). Another problematic thing is that the submitted EIA is ONLY about the mine itself and there is another completely separate part of the project - a 20km slurry line (from Cinovec to Lom u Mostu) which will require a separate EIA to be done again. The plan is: mine in Sedmihorky/Dubi, do crushing underground, magnetic separation on the surface (same location), then transport by slurry line to Lom u Mostu (you can check the huge brownfield area in Google Maps/Earth) to create final product; then use that to produce batteries in Prunerov (former coal plant).

So what's possible is permission in 2022, construction in 2023, first production 2024/2025 and it is anyone's guess what the price of lithium will be then and whether there will be better technologies (like Vulcan Lithium project from mineral water in Germany).