meeting with JSL We went me and two other members of stockhouse to meet with JSL at his office today.
Let just start by saying that he was very generous of his time and very responsive. For what it’s worth he really seems to care about the shareholders. For those who want, you may call or write him whenever you want he will get back to you. His coordinates are all on the company website.
-We talked for a long time on the actual market conditions. The main outcome of that conversation is that there might have been a decline in prices, but what most of the articles are not mentioning is that the price for the battery grade is still way above $10K/ton and more around $13K/ton for the quality we have. Not all battery grade are equal.
In his opinion, spodumene prices should see a turnaround within the next 6 months. When the reality of shortage hits the market, there will be a great gap to fill and the market should turn around fast. He said that it is hard to predict exactly when this will happen, but it shouldn’t be too long as the projected demand for 2025 is still around 1 million tons a year. The big players such as Albemarle and SQM won’t be able to meet the demand alone.
He mentioned that there is an education process for the large companies that will need lithium and that it takes time to change their ways of doing business. Many tries to find an alternative, but at one point they will have to invest the money in the mines because they need the Lithium. In his mind, it will happen sooner than later, it is only a matter of time and the time for most is now. He added that for large car manufacturers, as an example, $200M isn’t much compared to the billions of dollars they have invested in their plants.
-We talked about Primero, the reason for the delay, is because they tried different options for the construction of the mine in order to see if they could save money, but in the end all the options were the same then the original one, so they have decided to come back to the original plan. He didn’t go into details of the plan as it is very technical, but said that we should be able to get an update very shortly, before the end of October.
-We talk about the permits, he mentioned that we are at the first round of questions with the federal government and at the second round with the provincial. There should be a second round on the federal side but most of it will already have been completed by the Cree agreement. He reiterated that it is out of their hands, but added that usually permitting takes between 2-3 years, we have already pass the 2 year mark and he expect it to be finish soon. He doesn’t anticipate any problem.
He also mentioned that it is not a prerequisite to obtain the permits before signing a deal with a partner, it could be possible to reach an agreement before we receive the permit.
-We asked about the discussions with potential partners, he knows that we all would like a more detailed answer but he really can’t say anything at this point. He mentioned that it is progressing well, they are advancing with several parties in parallel so if it doesn’t work with one, they have other options. He mentioned that some parties have come here to visit the site. He seemed very enthusiastic, we could tell that he would have liked to say more, but he just couldn’t. He remains confident that we will be able to respect the timeline posted on the website, with a construction start in the spring and a partner between now and then. Still possibly by the end of the year, but some aspects are out of his control.
-We discussed about the money left in the bank, we have around 1.7 million currently. He said that the burn rate should reduce once the Primero evaluation is completed and therefore we should have enough funds to last another year. He doesn’t see a need to raise money at this time and remains confident that before we need it a partnership will have been signed.
-We asked about the possibility of a hostile takeover. He mentioned that more than 70 % of the stock is in strong hands and that we should not worry about that, but he is aware of the stock price and keeps on working actively to find support for the stock. He mentioned that right now the market is not favorable, it is not a great time to invest in promotion, the institutions are not ready to invest at the moment, but it should all turn around within the next few months and they won’t hesitate to do promotion at that time. The main driver to get the stock back up is to sign a partner so they are putting a lot of their time and resources towards that.
-We talked about the lithium prices and the stock price in regards to signing a partner. He reiterated that the lithium price for the Battery grade is well within the limits that is in the feasibility study and that it is not a concern at this time. He said that even if it is not pleasant to see the stock price at this level, it is not affecting whatsoever the negotiations with a potential partner as they are looking to structure the deal based on the NPV of the Rose project ($723M), no the stock price. He mentioned that they are not planning to dilute the stock. His goal is to not exceed 200M shares if they have to dilute at one point.
Kakoo88, if you have more on your side please combine it to our meeting, eventually we might get a better picture.
I wish that I could say more, but once again he was very limited in the information he could share.
Thank you once again to all that make this board amazing.
Good luck to every one.