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Some more speculation (in the absence of actual news) - the ops up date from last month mentioned "partnership interest at the project level" and also "organisations within the lithium value chain", so my take away from that is that they're looking to develop some sort beneficiation of the Li concentrate into lithium carbonate (likely battery grade) with a partner.
The Uis mine currently produces a "technical grade" petalite concentrate that would be used by the ceramics industry, I'm not sure that is the best feed for a battery Li plant, but there was a spodumene concentrate produced from Lithium ridge. So I would speculate that one possibility is a deal on the lihtium ridge property to develop that as a battery-Li mine, which would leave the current Uis operation unchanged. Such a deal might also provide some cash to accelarate the ramp-up of current Uis production.
Such beneficiation is in-line with the Namibian Mineral Beneficiation Strategy, which is also supported by the EU, and I suspect the deal will be with a European (German) company - maybe AMG Lithium or BASF?
Just me trying to read between the lines.
Agree @bohercom, it's the suspense that's killing us. A timeline/update would be great, but I feel AV should have been more circumspect from the get-go as there's now an expectation for a big deal to be done. It's distracting from the rest of the story, and could be detrimental to the SP if there is no deal (I would argue the delay is already hurting the SP).
@toptiger, the "detail" is pure speculation on my part, just trying to imagine potential scenarios - which is entertaining, but no subsititute for some actual news.
If the Li deal is truly off the table, I feel that AV would have come out and said it was off the table. However, I do think that the massive drop in the Li price has affected things... I have no doubt there were multiple (eye-watering?) offers at the time, but I would assume those were non-binding, and it's quite likely the offers that came subsequently druing the Barclays process (as the Li price was tanking) may have been less enticing.
There is also likely to have been quite a bit a met testwork/DD from any prospective partners which could have delayed things, and if there were multiple offers then there may be some negotiation going on. So as frustrated as I am on the lack of news, I am also aware that there could well be a deal still coming.
I also think that if the current deal isn't really "eye-watering" then it would be best not to do a deal, and I trust that AV and the board will do right by long-term shareholders.
Nonetheless, although I have confidence in AV, I do think the communication around the whole thing has been really shoddy. I think the major mistake was to speak about these "eye watering" offers before anything was finalised. A good lesson to everyone to keep your trap shut until you've closed the deal.
As for a "kodal-style deal", since we're bringing that up here again, I personally don't think the Kodal deal was great - looks to me like they gave away the controlling interest in their flagship project as well as a hefty chunk of equity to fast-track a mine build. Time will tell if it works out, but mine-building is hard and they have 8 months to build a mine. I'm happier with the more conservative (albeit slow) ATM approach myself.
Thanks CCC, yes I think it's quite clear they have done what they said they would. Great to see more price movement this week, could be because tin is up a bit but I suspect there'll be news soon.
Commodity prices generally have behaved quite well this year even though a lot of economies ( end especially China) aren't exactly roaring. Lithium and Nickel are exceptions but they've got a lot of supply/demand related volatility, but copper and tin have held strong.
I'm expecting that ATM will be very nicely positioned for strong cash flows as prices increase (especially for lithium), and that should set up a good position for Phase 2 financing.
Hey all, long-time lurker here on the forum, always enjoy following the discussions but haven’t ever posted. Figured since it’s been a bit quiet on the news front, I’d add my 2 cents. I’ve held ATM since listing, have been to Uis and have met most of the technical team and AV so have a decent insight into the company, although I’m not an insider and don’t have any more info other than what’s public.
Overall, I’ve been astounded at how well AV & team have performed over the past 6 years – growing a mining company from scratch is an extremely difficult ask and I think people might not appreciate the calibre of the technical team behind this story. Although AV is the face, there are lot of excellent people behind this which is why they have delivered results consistent with the plan, in-spite of doing this through a period of major supply disruptions. There are lot of moving parts here – plants producing 3 different products, ramping-up production, implementation of a world-class ESG programme, and they’ve done this all generally on time and on budget. AV should also be given credit for his general aversion to dilution (something that I hope to see in the coming deal announcement), which is not always an easy thing to achieve when trying to grow a capital-intensive company.
Like everyone else here, it seems pretty obvious to me that ATM is severely undervalued. Just looking at the PEA numbers for the phase 1 expansion it seems to me we should be probably have at least 5-10x higher market cap (300m to 600m, in line with previous phase 1B NPV estimates), and once phase 2 is done I expect we’re looking at a >£1bn company. I think Early_Bird’s guesstimate last week was spot on, although it’s hard to gauge true earnings when there’s so much capex going on, and PEA numbers should always be taken with a pinch of salt. That’s only talking about the main Uis mine (producing petalite). The other Li deposits which have spodumene should add even more to that number.
Price movement this week makes me hopeful that some news on the deal might be coming – I expect the recent drop in Li prices probably caused some of the delays. Longer term, I expect market cap growth to be consistent with earnings growth as production expands, and I think Phase 2 will still need to be funded, so it could be a few years before we see >1bn mkt cap numbers, but certainly I don’t think a >20p SP is unreasonable in the short term.