Getting harder to valueThe spot price of Li carbonate has taken a jump up to 216,000 yuan on the spot market.
I understand that price is not where long term contracts are being done, but it does point to the scarcity of the resource. This will add depth to the assumptions in the feasability report from a year ago. It also should push management to get a serious drill program going, larger than the 6 hole efforts that have been done over the last year. Size matters in this game, as does purity, but drill results are needed for both. I understand the effort on chemical processes, but the ore they have found so far is cleaner (very low, or no iron at all)and higher grade than everyone else. That means the standard chemical process the Chinese have been using at Greenbushes will work just fine here. A faster, easier process would be better, but it also adds a level of uncertainty. That is what got Nemaska in trouble. The multipliers FL would get if they can add significant tonnage, and get a higher price will be significant.
It also seems like the entire sector may throw out fundamentals and just ride the investor enthusiasm wave. LAC and PLL have been big winners as they are better known, but FL has the potential. Best of luck.