Top broker slams David Lenigas - takes REM & Bacanora off buy list because of Big Dave

Comments

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   addick

   16 November 2015, 02:53

   Monk is demonstrating a fundamental misunderstanding of BCN. REM is a minority shareholder and although DL and his sidekick both have non-exec positions, they are not able to influence the prospects for the company, particularly as BCN now has its first institutional shareholder.
   Monk is making a big error dropping BCN and he will come to realize the error of his ways during the course of next year. By the way, I’d be delighted to hear of a better prospect than Sonora.

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   Phil

   16 November 2015, 03:15

   Off subject.

   BKY change of Nomad to W H Ireland ?

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   wildrides

   16 November 2015, 03:52

   Monk is thick …………… Del Boy Lemongas has not been involved in LGO as a director or manager since summer 2014 BEFORE the oil price collapse from $105 a barrel to $ 41 dollar a barrel . Clue ……. its the oil price you thicko . He has not been involved in Fastjet for even longer than that , If your gonna dis the man ( which I am more than happy to do on other issues) at least get your fecking facts right . Wanker does not come close.

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   Drunken Sailor

   16 November 2015, 07:35

   Addick,

   If you like the idea of getting Lithium out of mud then have a look at these guys:

   http://www.westernlithium.com/

   TSX listed so you would need to be with a broker that can do trades on TSX.

   Bacanora are also TSX listed and the Canadians were not overly impressed, which is why they dual listed on AIM – no doubt encouraged and aided by big Dave.

   Western have a patented process for getting the Lithium out of mud (most Lithium comes from rock or from brine) just because a process is patented does not mean it works at the commercial scale. Bacanora will have some problems here as the concentration of Lithium in most of their mud is well below the minimum needed for the Western patented process. It is easy to make things work on a small scale in a lab, it is a whole different ball game proving it works when scaled up and in the field and an expensive game at that. Recovery rates often fail to meet expectations and they are all important when it comes to determining if a project is commercially viable or not. At best the lack of a commercially proven process for getting Lithium out of mud (rock and brine extraction processes are well proven) represents a significant risk, which is easily glossed over in PR material and Tweets.

   Also consider there is quite a bit of supply from brine projects due to come on stream over the next few years. Which means that whilst the battery and EPV story is all very rosy, it is unlikely that demand will outstrip the increasing supply, especially now China (the main market for EPVs as they try to clean up their smog bound cities) seems to be going into recession. There is also a lot of processing required to get what is extracted from the mud to the quality levels of LiCO3 needed for EPV batteries. No doubt the BFS, which is now funded (I doubt they have enough to get right the way to the end) will be looking at exactly where in the value chain they try to position themselves – they won’t be able to cover the whole chain, hence why they are looking for off take partners. It will be the off take partners who add the bulk of the value, as they increase the purity to the all important level (99.95% required for EPV batteries) – don’t be fooled by prices for the finished battery grade product, the prices for what gets extracted from the mud will be a fraction of those prices.

   Western also have a scheme for selling the mud for fracking and may well have already cornered the market for this product. It is really good if you can sell the waste as well as the Lithium. Any way do your own research thoroughly and don’t get taken in by glossy PR spin and Tweets. Remember that IIs are not the experts they are cracked up to be, a diligent PI who does his research thoroughly can often find things the IIs have not even bothered to consider.

   Finally I think big Dave has been far more influential that you think and his continued involvement through REM and on the board could well have an adverse impact on Bacanora – it is quite a step for Andrew Monk to strike both REM and BCN off his buy list. I doubt he did that just for the hell off it. That said even the best investors make mistakes cf Buffet and Tesco.

   For transparency: I have a significant holding in ASX listed Galaxy (GXY), which I have to admit has been a disaster up until now – has a rock based Lithium production project in Oz which was put on care and maintenance when they ran into financial difficulty and had a processing plant producing 99.95% LiCO3 in China, which they flogged to reduce debt. I am hoping it has now turned the corner (currently in trading halt pending an announcement (ASX trading halts can mean good news is coming as well as bad) this may be something about the 50% stake in the Rock based Lithium concentrate operation they have sold or it may be another step towards bringing its Lithium from Brine project in Chile on line in the next couple of years, or the whole thing could have gone tits up yet again after the SP more than doubled in the past month or so (I am still on quite a significant loss as I did not average down at the bottom)). If you fancy doing your own research into GXY I would be interested to hear what you find. You can e-mail me drunken.sailor1@hotmail.com.

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   J P Spaghetti

   16 November 2015, 13:18

   PMSL at the first sentence after the disclaimer (again – sorry Dave), and that’s most welcome right now!