CRE staffing, LI price realityCRE is by far my largest position in the LI industry. Four lesser holdings are ALTAF, PILBF, GXY, and AVLIF. The non-CRE holdings help me understand the details of the industry and let me see through the constant stream of false analysis coming from elements of Wall St.
You ocassionally see an announcement from CRE that it s adding to it's staff; and as a stockholder in a company that does not yet have a mine, you may ask yourself what in the world do they need this person for at this stage. The answer is quite straight forward and for those who have attended the AGM, it is a frequently heard reason- LI extraction and preparation for shipment is an incredibly complex operation, and we need talented people familiar with these processees if we are ever going to have a "going concern" operation in the LI business. Want to hear experts tell u in detail what it entails? Go to Pibara Minerals.com and listen to the first 30 min of that 1 hour qtrly results presentation.
Pilbf's DFS -definitive feasibilty study- stated that PILBF's cost of production was estimated to be $330/ton; yet, PLS has been in production for one year and is still only 85% of nameplate capacity and is actually producing at $ 540/ ton (US dollars) . PILBF estimates that it will fiirst hit $330/ ton in June 2020, so that alone tells u how tough it is to get to BFS/DFS numbers. That is almost 2 full years with experienced/knowledgeable staff.
From about the 20 min mark u wiill hear CEO Brisden tell u that China is a price dominated market while Japan and Korea are a quality of product dominated market. Brisden is movng PILBF closer to Korean Posco toward a quality operation and not the down and dirty Chinese market.
Brisden is carefully managing the business to meet customer needs. 2 Chinese LI giants - despite Wall St false claims of over supply- Gangfeng and General LI are having real difficulty bringing their LI conversion plants on line which means there is LESS LCE AND LIOH in the market, not more. So PILBF is shipping LESS LI to customers and stock piling some of it. 25,000 tons currently and the CFO estimates that will be gone by Sept.
PILBF is producing at $540/ton and selling for $640/ton with an expectation of selling $330/ton LI for $640 or higher one year from now
So overall u need to be patient with this investment, it is complicated and delicate to bring high quality LI to market. Hopefully this at least partially explains why CRE is regularly 0n-loading experienced senior staff.