RE:SEDAR FILINGI will readily admit I am not an expert here, but why does the chemical demo plant need to be done in order to just mine spod and concentrate it? That is the fastest way to profitability, get a take or pay contract, start the mining process, and do the chem plant later with cash flow. Diluting today, 5 years before the chem plant could possibly be built is expensive.
Corning does not need nor want a chemical plant, they just buy concentrated spodumene. Start there.
There is no doubt mgmt has misssed all the timelines they had, that is partly the nature of the business, and partly a junior mgmt team. Rick Walker is a seasoned road and pipeline builder, not a miner. Trevor Walker is running his first rodeo, and it is not an easy one. Look at the difficulty Piedmont is having, with a fat cash hoard. And they do not have native agreements to get to the extent FL does, nor do they have the infrastructure issues.
The FL story is not well known at all, and it certainly seems the new underwriters were just there for the fees, they are not supporting this at all. The last underwriters were snubbed for this deal, we had better hope RBC will cover these guys, if not FL just made another blunder, similar to not getting coverage from BMO. Mgmt can make mistakes, just please make new ones, not the same one over and over. It is possible we now lose some analysts who had covered FL and now have been shut out of the deal and will therefore not keep coverage.
This is a race, and FL does not seem to know it. Expecting the Li price to stay up here forever is a fools game. It might, but I have never seen any commodity chart last at this slope. There is a lot of competition for investment capital, and government largesse, and FL is not winning. Secure these prices while they can, and get cash flow. That means build a small mine fast, get an exploration permit that allows for the sale of some ore while the real permit is being debated.
The IR has been terrible, but to be fair to Mr. Ugurgel, it has not been a priority for the Walker family, he has a lot of other duties, and was not trained, tasked or supervised for this role. Bring in a pro here, and get Bora Ugurgel to help with the permits and process to get cash flow.
Cash flow projections for FL are prettty easy to do, as there is no revenue in sight. Why were cash levels allowed to drop this far? They should always be 24 months ahead of insolvency, and they clearly were not. THe board should have raised this cash at higher prices when they had the chance. We would have all been mad for a short while, but they are well paid to make the correct decisions, not be blinded by the value of their options.
I like the asset, but management has some issues to get right, and I can be patient if they are showing improvement. So far, the jury is out.
Best of luck