GREY:NMKEF - Post by User
Post by
BearlyBullishon Jan 20, 2018 2:18pm
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Post# 27401307
My take on the recent financing delays
My take on the recent financing delaysListen, everyone is stressing about how they are not closing the financing deal.
The reality is that:
A) Those deals are extremely technical and have so many details that it is hard to come at a full and final agreement.
B) SQM just dropped a major bomb with Chile's government granting them the right to scale up their operations by more than 6X. They are the world's biggest producer and this will have the impact of reducing the large long-term price inflation and potential shortage of lithium that was dreaded by automakers. However, at the same time as calming the fears of battery producers, this will reduce the long-term (2021+) selling price of lithium. Many analysts are now predicting an increase in short-term price to north of $11,000 a ton and a decrease in long-term predicted price to around $10,000, close the the current prices.
So obviously, if you're about to invest tens or hundred of millions into a lithium producer, you now want to make sure that you revise the deal to correctly represent this major impact.
I believe that it is not a dealbreaker however, Nemaska will remain a very low cost producer thanks to its vertically integrated structure and innovative technological process.
What do you guys think of all of this?
Let me know!
BearlyBullish