RE:Questionfundamentalinvestor wrote: I own NLC and have for quite a while - but do not follow it as closely as others. I am looking for help for understanding what is putting pressure on NLC SP (beyond industry) - I am long and am surprised they double their resource, have proven management, growing industry and SP seems to be under extreme pressure - what is causing the sell pressure on NLC (company specific) - just trying to understand what I am missing. Appreciate the boards help.
Short answer, I don’t believe it’s company specific. The entire lithium mining industry has fallen substantially.
You can be critical and say that Argentina’s inflation/economy has been scary. But then you can counter that point with the fact that Ganfeng just purchased a project in Argentina a few weeks ago. Also Chile has higher taxes/royalties. So Argentina still might be scaring off investors.. even though it shouldn’t.
The price of lithium is going down. But that is all factored into the PEA. We are still above the “high” lithium carbonate price per ton. We have less than a year pay back period.
NLC is still needing a partner. But there has been positive news on that regard with the team going around the world advertising their company. I think it’s looking positive like we may partner with an auto maker/lithium producer sooner than people expect.
Sentiment is still down since that analyst, at this point I forgot where he worked, stated that lithium was going to crash due to oversupply. With NLC being one of the most economic mines I’m not worried about this. Lithium demand is going to stay high no matter what happens, even if Tesla goes out of business other auto makers will step in. This is simply because the price for an electric car vs gas car are shifting in favor of electric, and accelerating with each year that passes. Battery technology has also favored lithium. New solid state batteries will require much less cobalt, but much more lithium. That technology is years away but is the most promising in my mind to replace current batteries.
Overall we are still in the early stages of the EV transition. I think, on the road, we will be seeing >50% of vehicles becoming electric over the next 5-10 years. This transition to EV will only accelerate if the economy falls into hard times. Again, I think people are just discounting the extremely positive economics of the future EV market. People do not think the transition will be as extreme and are betting on a lithium oversupply.