I also thought about Nevada, because Ganfeng is a technical partner there. Ganfeng’s 37.5% stake in Cauchari should help fend off takeover attempts by others, but it could also increase Ganfeng’s appetite to eventually get a bigger piece of the pie (Nv) or even the whole pie. This is plausible because this is clearly China’s current modus operandi for lithium (The rest of the world better wake up). A more far fetched but still possible scenario would be a partial or full sale of Cauchari to Ganfeng down the road. The arrangement could be similar to how Galaxy recently sold some tenements to POSCO to help fund a big chunk of their brine project in Sal de Vida. The sale of Cauchari would only involve resources in Argentina and not in the US, which may fly better for approvals. Such sale could help fund Nevada’s $581M capital project to significantly reduce stock dilution during financing, which is one of my big fears if the financing of Nv is not done properly. However, in my opinion a big partnership with Ganfeng involving both projects is the most likely scenario and can also make it easier to fund/build Nevada since Ganfeng is already involved and is a big fish.
I recognize that all of the above is highly speculative on my part, but please understand that these are tough but exciting times, especially with this announcement. It is some times healthy to speculate and to try to think a bit ahead or outside the box. I am sure that we will learn more tomorrow, and I hope LAC will make wise decisions that benefit the stock holders. I also hope we will learn at some point what happened to SQM.
My gut feeling is that the SP will tdrop more in the short term due to the void left by SQM, but maybe the higher ownership by LAC may compensate once the market digests the news. I hope that conference call will help eliminate concerns, but I will start getting the wallet ready if it doesn’t.
Interesting times indeed...
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