Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Tesla working to secure Lithium Supply The company is reportedly in talks with SQM, Chile�s largest lithium producer, to secure lithium supply. https://electrek.co/2018/01/29/tesla-tsla-secure-lithium-chile-sqm/ This sort of deal could create an interesting future scenario. Suppose at some future date the demand for lithium exceeds supply by 5%. This indicates a rising price. Suppose now that, by that time Tesla, and other electric car manufacturers, have fixed deals with a number of lithium suppliers and suppose that this accounts for 80% of the supply. So we now effectively have a situation where the 25% of unfulfilled demand is chasing the 20% of uncommitted lithium. Would this create even more price pressure? Most certainly it would lead to greater market volatility.
The following may not being entirely apparent from the postings on this thread to date:- (at least it wasn't to me!) http://www.proactiveinvestors.co.uk/companies/market_reports/189774/ftse-100-struggles-for-direction-as-investors-weigh-mixed-uk-economic-data-189774.html A 50%-owned subsidiary of Bacanora Minerals Ltd (LON:BCN) has acquired 295 hectares of new exploration ground situated within 5 kilometres of the Zinnwald lithium project, also 50%-owned. The new ground covers a previously-mined area called Falkenhain. The thinking is that material from the new ground could help to prolong the life of any project developed at Zinnwald.
Canaccord Genuity now has a GBX 175.00 target price per share on the 152.54 million GBP market cap company or 41.70 % upside potential. In a report revealed to investors and clients on Thursday morning, Bacanora Minerals Ltd Npv (LON:BCN) shares have had their Speculative Buy Rating reaffirmed by expert analysts at Canaccord Genuity. https://friscofastball.com/key-professional-analysts-at-canaccord-genuity-didnt-change-their-speculative-buy-rating-for-bacanora-minerals-ltd-npv-lonbcn-shares-today-their-tp-is-gbx-175-00/
My view is that battery swapping will be the winner. Actually car batteries are pretty hefty so it is not as straightforward as you might think, but nevertheless where this a will there is away. My guess is that a car would have two 'half batteries' which would be used alternatively, so once one of the halves is depleted it can be swapped at a suitable time. A car would be designed to facilitate the swapping process (think of loading a CD) and the process would be performed by automation. Presumably, the first generation of batteries would also allow direct recharging so it would be possible to leverage the alternative solutions. The advantages of battery swapping as described are. The removal of customer fear of being stranded. The fact the grid would only need to be upgraded for charging stations. The fact that charging can be performed off-peak.
Thanks for the information, Oily
Does anyone know if Investor's Chronicle has reported and commented upon recent developments at BCN or has the news been swallowed up by the Christmas void as I feared would happen?
My concerns haven�t gone away as the price slips. The issue is that with a share whose profits are in the future, price changes tend to be relative. So if some good news comes along that causes the price to rise by 20% then it will rise by 20% irrespective of whether it has slipped by 10% or risen by 10% over the preceding days. So it is likely that an FS announcement will have a fixed effect on the share price of x % whatever it is at that time, any drift down now will not be recovered. The market isn�t necessarily rational. (We can see a similar relative effect with UK interest rates where the argument 'if interest rates rise the economy will be affected' takes precedence over 'we should no longer have emergency interest rates now we have no emergency'.) One thing I have found over the years is that once a share has a long run of being undervalued, it continues to be undervalued. The market tends to assume that there is a reason for the undervaluation irrespective. Once the good news comes along it is not fully priced in. If a take over bid is made for BCN, then the bid will be relative to the price at the time and not based upon an absolute valuation. I am beginning to lose faith in the management of BCN.
I am somewhat concerned that the FS may come out too close to Christmas. I used to own a share which reported around Dec 22. If the results were poor the price would drop because those who were investing in the company naturally took notice. But if the results were good they were often overlooked, because potential new investors had switched off by that time. Trading before Christmas is low and finiancial journalists tend to concentrate on pre-prepared end of year reviews. By the time the market resumes in the new year any good news that had been released just before the Christmas break is history. Let us hope the FS is released early enough to avoid the Christmas void.
Actually, there are three mentions of BCN. The first is 'Looking at the two figures at the bottom of the post, we can see that Global X has made some big changes to their fund, starting with expanding the number of companies held in the portfolio. The most notable changes in our opinion have been: Doubling the size of the positions in Pilbara Minerals, Nemaska Lithium, Orocobre, Lithium Americas, Galaxy Resources, and Bacanora Minerals.' The second and third show that the holdings have increased from 1,146,657 shares at 3/8/2017 to 2,374,977 shares at 17/11/2017
'on the point of the FS ,it must be noted every RNS of late has stated by year end .......so I see it nailed on now with no slippage ....' Agreed and in any case the exact scope, definition and contents of a full FS are not tightly defined. So my guess is that the deadline (end of year) is now fixed, the detailed contents of the FS will be scoped if necessary to ensure that the deadline is met. We all know from our own experience that you can polish a report indefinitely but if you have a deadline, you put out on time whatever you have (provided that it covers the main points).
So the 'huge buys' were completed on Thursday night. Previously, I had speculated that the price rise last week was being fuelled by large not-fully-fulfilled orders in the background. Can't be sure, but these buys seem consistent with that speculation. Friday we slipped back after completion of the buys. Going forward we could see the price slip further now that the buying impetus has gone. But there again if and when the identity of the buyer(s) becomes known, then that might inject fresh confidence into the stock depending on who it is.
'Revenue will be biggest change. FS used $6k per tonne, contract price at least double now.' I think you will find that the biggest change will be in (discounted) net future profits. Consider this as a hypothetical example. Production costs $5k per tonne, revenue $6k per tonne, net profit $1k per tonne. Compare this to the case where the contract price is now double. Production costs $5k per tonne, revenue $12k per tonne, net profit $7k per tonne.
Thanks Kluck but it doesn't fully answer my question. The borate concession was attributed a high NPV (some other poster stated this and I can't trace the number but from memory it was many 10's of millions). The recent "Final Results Report' stated that fair value for the concession is now $679,125 and that consequently there was an impairment of $8,000,000. Presumably then, the current talks will lead to something consistent with $679,125 rather the previous NPV. It is not entirely clear to me why the asset is now considered to be worth $8,000,000 less than before, (as indicated by the impairment figure). This is becoming a detail now as the Lithium drives up the price.
The price rise doesn't seem consistent with the recorded trades. I am guessing that there is a large buy order in the background that has yet to be fully fulfilled.