RE:Crazy tin foil hat theoryInteresting thoughts..
1. This would be the equivalent of super high grade Fe... so it will always attract buyers as well good margins even at the bottom of the cycle... So there should be no compulsive need to sell unlike those brine guys who are not sure if they would be making profits a few years down the line..The max value on selling that PLU can hope to get at this point would be about USD 500M (which would be a very very attractive 6 fold return) .... but if they wait and get into production of about 100,000 tpa, then annualized EBIT alone would be easily more than that (assuming ebit/t of 5000 which is conservative)... so we might look at a valuation of a USD 3-5 B in a few years time. Albeit with some dilutions along the way... but perhaps not more than 30% as I see it.
2. The insider buyig has practically stopped... if the sale was imminent (within the next 6 to 12 months), then there is no reason why they should have stopped.
3. However I do agree that the sale would be inevitable.... but that would happen over a 3-5 year timeline.
But good for all of us who are long this stock... this happens to be my second largest holding and so very excited on the newsflows.
Cheers,
Y93H1979 wrote: Now before I post my thoughts, please please please please do NOT base any investment decisions on my following far out theories. These are my THOUGHTS only. I've accumulated a position in PLU based on my own DD of the facts and in my previous posts I have always sought to encourage others to do the same.
So, onto my conspiracy theories...
Ever since the press conference with the government officials present, I've thought something was brewing. A lot of info was brought up in that presser that was not yet officially released to the market. Dr Stefan was making some REALLY forward looking statements. Then the president of Peru makes some comments about Li and U regulations in the next 6 months, which were obviously in reference to PLU. When does a president ever mention a microcap junior mining company? What reason could he possibly have to do so? This just further confrimed to me that someting was going on under the surface... But what?
I got to thinking about the timing of that press conference. It was just after the metullurgical testing results came back from ANSTO. This to me was always the key to the Li project. No pure lithium, no project. The fact they got 99.7% purity (on a first pass test) was HUGE. This makes all the difference to a Li project. On a side note, I think the Li market could be similar to the Fe ore boom last decade - big runup in price leads to a bubble in the juniors followed by (possible) oversupply, mainly of lower grade (58%) product, while the higher grade (67%) fetches a considerable premium. But I digress. The 99.7% grade (without refining!) must have caught the eye of some majors.
So knowing this, Dr Stefan does the press conference.
As something brews, the one uncertainty is the Li permitting regulations in Peru. Knowing a major is sniffing around (SQM anyone?), a company which could potentiall bring in a large investment in a short amount of time the government gets involved, with the president making the Li / U statement.
If I were a big Li producing company, making all my Li from brines (with the problematic issue of increased royalties in the Ataccama)and which requires further refining for battery production, and with a complicated process to produce hydroxide, I would be wanting to diversify into hard rock, which offers the advantages of faster production to market and the more accessible option of producing hydroxide, which is going to be the big growth story in battery chem. Not to mention it is more easily scaleable than brine production.
Then just last week, SQM sells its stake in LACs brine project. Maybe just coincidence.
Then the price of PLU gets hammered. Maybe someone with a vested interest trying to keep a lid on SP? And the lack of buying from Disbrow and Relling? These guys have been relentlessly buying since the Li discovery. But nothign lately? After all the good news?
Then the announcement yesterday about the new CEO. Initially they had stated they were looking to bring in someone with processing experience as they moved from exploration to development. Now we find out they've brought in an investment banker
https://canada.businesschief.com/True-Gold-Mining/executives/Alex-Holmes/98
M&A was mentioned twice in that short bio.
So obviously PLU is looking to a buyout of the Li project. But to who? As I mentioned at the top, this is FICTION, that I've concocted based on what I've seen. I thought I'd discuss it with fellow PLU'ers. What do you think? Tin foil had off.
I would personally welcome a takeover of the Li project(at the right price!). The Li market is hot, better to sell while there are buyers and let someone else raise the capital and take on the operational risk. I doubt a Li producer would want the U project though... So spin that out please. Iron ore companies were at their peak during the boom, and they haven't regained their prices since those days. Timing is everything in the resources business, something Ian Stalker knows well.