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Message
re: Diving deeper on Standard Lithium?
Posted on 2/24/22 at 6:10 am to CollegeFBRules
Posted on 2/24/22 at 6:10 am to CollegeFBRules
quote:
Did they just announce the JV?
51% positive they did...
1
Posted on 2/24/22 at 6:13 am to Dock Holiday
I honestly have no idea.
51% minimum equity stake?? Love it!
But up to 100% stake? That ain’t a JV.
Not entirely sure what the means. At first glance I think it implies that Koch and SLI got pissed waiting for Lanxess to make a decision and essentially bought them out saying look, if you agree to let us operate on site and use your brine, we’ll pay no less than half of the capital and if you don’t like the pre engineering results we’ll just take on all of the risk. Just stop holding us up.
51% minimum equity stake?? Love it!
But up to 100% stake? That ain’t a JV.
Not entirely sure what the means. At first glance I think it implies that Koch and SLI got pissed waiting for Lanxess to make a decision and essentially bought them out saying look, if you agree to let us operate on site and use your brine, we’ll pay no less than half of the capital and if you don’t like the pre engineering results we’ll just take on all of the risk. Just stop holding us up.
Posted on 2/24/22 at 6:16 am to Fe_Mike
Well at least the ball gets moving one way or the other now. Like I said before, best outcome was to have the Lanxess production be structured like Tetra (where they just get paid a royalty and are out of any decision making), and if Lanxess doesn’t move forward by buying into the Project Company under the terms of this new agreement that will be effectively what happens.
Posted on 2/24/22 at 6:17 am to Fe_Mike
They also may have picked the worst possible market day in the last 20 years to make this announcement
Posted on 2/24/22 at 6:18 am to Fe_Mike
quote:
We have already begun the process of engaging and integrating the strategic team members to make this project a success. With the recent investment from our largest shareholder, Koch Strategic Platforms, we are fully funded to complete all planned Project milestones leading to a Definitive Feasibility Study, which is expected to be completed in Q4 2022”.
quote:
The parties have also agreed that development of the second and third projects on the Lanxess properties will be on a joint basis and that the parties will perform the same roles using similar contractual structures as the first Project.
There is a lot here to chew on...
Posted on 2/24/22 at 6:18 am to Fe_Mike
If so. shite is on sale for 5.79 right now
Posted on 2/24/22 at 6:20 am to Fe_Mike
is it gonna go up now?
Posted on 2/24/22 at 6:25 am to jimjackandjose
Yep.... added more on sale.
Posted on 2/24/22 at 6:29 am to Fe_Mike
quote:
They also may have picked the worst possible market day in the last 20 years to make this announcement
No freaking kidding. I also have clov that blew out earnings yesterday afternoon and popped 20+% AH... Will be lucky if it isn't red by open at this rate. Who knew we'd need the JV announced just to keep from drilling.
Posted on 2/24/22 at 6:42 am to Fe_Mike
quote:
They also may have picked the worst possible market day in the last 20 years to make this announcement
And day. the Day Russia invades Ukraine.......
Posted on 2/24/22 at 6:45 am to Fe_Mike
Okay so after reading the full announcement and not just the E*trade summary on my phone, looks like I was right. This gives SLI and Koch permission to move forward at their own pace with the guarantee that Lanxess basically isn’t going to stonewall any progress by pulling brine supply commitments, etc.
It’s not a JV. But it is a road block removed. Which is exactly what I thought would happen when Koch got involved. Lanx was stalling on capital commitment so SLI found another, stronger, backer. They get more equity stake now which is fantastic for your investment thesis. A lot of the money to get this off the ground has already been financed and priced into the market, so if you thought JV looked good yesterday it looks even better now.
At a high level, SLI has essentially swapped partners from Lanx to Koch. Lanx can still dance if they want to, but the party is officially happening with or without them. I imagine if Lanxess doesn’t want to participate we’ll see one more ~$100M Koch private placement around the beginning of ‘23 which will necessarily dilute just a bit more. Then SLI will own the whole damn operation. Do the economics on 100% ownership and see how ya like them apples.
It’s not a JV. But it is a road block removed. Which is exactly what I thought would happen when Koch got involved. Lanx was stalling on capital commitment so SLI found another, stronger, backer. They get more equity stake now which is fantastic for your investment thesis. A lot of the money to get this off the ground has already been financed and priced into the market, so if you thought JV looked good yesterday it looks even better now.
At a high level, SLI has essentially swapped partners from Lanx to Koch. Lanx can still dance if they want to, but the party is officially happening with or without them. I imagine if Lanxess doesn’t want to participate we’ll see one more ~$100M Koch private placement around the beginning of ‘23 which will necessarily dilute just a bit more. Then SLI will own the whole damn operation. Do the economics on 100% ownership and see how ya like them apples.
Posted on 2/24/22 at 6:49 am to Fe_Mike
We’ll all be so old in 2023
Why’s it gotta take so long
Why’s it gotta take so long
Posted on 2/24/22 at 6:56 am to el Gaucho
Fe_Mike, do you think Tetra is a more attractive stock now based on what you posted?
Posted on 2/24/22 at 7:11 am to el Gaucho
We’ll all be vodka drunk and speaking Russian in ‘23 as well.
Posted on 2/24/22 at 7:13 am to Wraytex
Nope. I think Tetra is totally decoupled from SLI now.
Posted on 2/24/22 at 7:23 am to Fe_Mike
So we are buying more SLI today?
Posted on 2/24/22 at 7:29 am to GREENHEAD22
If I wasn’t still overleveraged I absolutely would. This is a fantastic buy opportunity.
Posted on 2/24/22 at 7:30 am to Fe_Mike
quote:
SLI has essentially swapped partners from Lanx to Koch
I agree with 90% of your take, but don't think this is a "swap".
My take is there is now a three way partnership with Koch, Lanxess, and SLI, with SLI being the center piece/conduit.
SLI has to keep Koch happy by continuing to progress on the project(s) while also playing nice with Lanxess in order to squat on their property and use their existing resources (brine).
Is three a crowd, or can SLI thread the needle over the next few year and make bank?
I like the carrot floated out there in the article about "project 2 and 3".
Posted on 2/24/22 at 7:32 am to el Gaucho
quote:
We’ll all be so old in 2023
Maybe I can use this to pay for my kids college instead of the boat we were supposed to go fishing on.
Posted on 2/24/22 at 8:23 am to kengel2
I’ll second this.
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