PIEDMONT LITHIUM SIGNS SALES AGREEMENT WITH TESLA

Piedmont enters into binding sales agreement to supply spodumene concentrate to Tesla

Five-year fixed-price binding agreement with optional five-year extension

Agreement confirms the strategic nature of Piedmont’s unique American spodumene deposit

Discussions are ongoing with respect to other lithium and by-product sales arrangements

Feasibility indicates results of NPV8 of US$2.5 billion and post-tax IRR of 32% for the 30-year project.

DJ Tesla CEO Elon Musk Has Been Tweeting. Prepare For Lithium Stocks to Move.

Barrons.comPLL$0.935$0.00 (0.0%)$0.96$0.935

11 Apr 2022

Tesla CEO Elon Musk lamented the rising cost of lithium in a recent tweet. He even suggested that Tesla might get into the mining business to help solve shortages of the key raw material that goes into rechargeable lithium-ion electric vehicle batteries.

Tesla-as-miner has far reaching implications for the EV industry. Will locking up long-term lithium supply become a strategic imperative for the industry? Will other auto companies look to backward integrate into the EV battery supply chain? Those are longer term questions for investors to ponder. More immediately, lithium mining stocks--most likely the smaller ones--could react wildly in Monday trading.

The larger, more established, players include Albemarle (ticker: ALB), Livent (LTHM) and SQM (SQM). ( Livent still qualifies as a small capitalization stock.)

Three smaller players include Piedmont Lithium (PLL), Lithium Americas (LAC) and Sigma Lithium (SGML.Canada).

The three large players have a combined market capitalization of more than $50 billion. The three smaller players, which are in different stages of ramping up new projects, have a combined market cap of less than $10 billion.

"Price price of lithium has gone to insane levels!" tweeted Musk on April 8.

He has a point. Benchmark lithium prices are at about $78,000 a metric ton, up almost 80% year-to-date. The price for a basket of battery materials Barron's tracks is up about 60% year-to-date, theoretically adding roughly $2,000 to the price of an EV.

Most battery materials, however, are bought on a contract basis. Most commodity prices quoted are spot prices. When spot is greater than contract, it is a sign that contract prices will move higher.

"Tesla might have to get into the mining [and ] refining directly at scale," said Musk, adding in a later tweet "we have some cool ideas for sustainable lithium extraction [and] refinement."

Scale doesn't appear to be the big issue. There are large miners such as Albemarle that produce lithium for well less than $10,000 a metric ton, according to company documents and Barron's calculations. What's more, everyone in the lithium industry is investing for growth. Wall Street expects Albemarle's capital spending to be about $1.4 billion in 2022, more than double levels from just a few years ago.

Current spot prices are good enough for miners to put capital into the ground. Instead, the issues appear to be EV demand growth, which is happening faster than people, and the time it takes for the mining industry to ramp up new capacity.

Lithium miners, it seems, are a little behind the growth curve.

Tesla (TSLA) has already taken steps into the industry, working with Piedmont. Tesla agreed to take production from the startup back in 2020. That deal sent Piedmont stock up more than 230% the day it was announced.

Still, in that deal, Piedmont will be doing the mining. Musk is probably happy to take that company's lithium. He just wants more.

The three smaller lithium miners are up about 33% year-to-date on average, propelled by higher commodity costs. All three stocks fell on Friday along with the S&P 500.

Shares in the three more established miners are up about 20% year to date on average. All three of those shares dropped on Friday as well.

Write to Al Root at allen.root@dowjones.com

(END) Dow Jones Newswires

PLL lithium is moving 

SYA 25% holding is a in trading halt , resumes trade again 1/7/21

CEO has circa holding 7million

Mr Keith Douglas Phillips

Chief Executive Officer,Managing Director,President (Since 2017)

Bio

Mr Phillips have 30-year career on Wall Street during which he has worked on strategic and financing transactions representing over US$100 billion in aggregate value. Mr. Phillips was most recently a Senior Advisor with merchant banker Maxit Capital, after leading the mining investment banking teams for Merrill Lynch, Bear Stearns, JPMorgan and Dahlman Rose. Mr. Phillips has worked with numerous mining companies, including many established global leaders, and has dedicated most of the past decade to advising exploration and development-stage companies in achieving their strategic objectives, with a particular focus on obtaining relevance in the United States capital markets.

I took small positions on 3 next-generation mining companies. One of them is Piedmont Lithium. There is plenty of excellent research out there on strawman and youtube. Not gonna lie, the prime reason I invested in Piedmont is the Tesla supply deal. As a Tesla shareholder, the amount of raw materials that they need is enormous to meet the 100GWh target in 2022. The main ingredient for batteries is Lithium and most of you reading this straw must have watched battery day. Lithium is used in all chemistries for EV's (Iron Phosphate to High Nickel). The major theme for Tesla is localising the supply chain, watch Rock Stock channel and EV stock channel on Youtube where lithium mining experts draw out the supply chain for batteries. 

Piedmont located in North Carolina, USA has hard rock spodumene concentrate which is essential to make LiOH (lithium Hydroxide). Lithium Hydroxide is used for high energy density batteries, so batteries with high Nickel cathodes. The types of vehicles suited for this type of chemistry is the Tesla Semi and the Cybertruck. They are large vehicles and need plenty of batteries. Furthermore, Tesla's new gigafactory in Texas will have a cathode plant for hydroxide conversion. So Tesla only needs the lithium so they can convert it to LiOH using a sulfate-free process explained on Battery day. Piedmont is close by and is expected to supply Tesla ~ 50,000t p.a. which is 1/3 of what they aim to produce. It is a 5-year fixed-price contract with deliveries to commence between July 2022 and July 2023. By then, the Texas Gigafactory and the cathode plant would be completed. Sales agreement create incentives for mining companies like Piedmont to proceed with the project. 

I am not a big fan of mining companies, but since I own Tesla, I am forced to understand what goes inside a battery. Youtube channel The Limiting Factor is one of my favourites. Lithium projects are extremely important for EV companies as they have to secure supply now for the exponential demand in the next 4 years. It is amazing that Youtube and Twitter have become a source of information for understanding the battery industry. 

The DFS is the next stage for the company and is expected to be completed mid-2021. Piedmont is also building their own hydroxide plant in North Carolina, I am assuming this is to cater to customers outside of Tesla. They invested in Sayona Quebec to supply Piedmont with the greater of 60,000t p.a. or 50% of Sayona Quebec's spodumene concentrate production. The contract with Tesla is an initial one if Tesla becomes the largest automaker as I think they will, then they would need more lithium. 

For a very small weighting on the portfolio for large upside opportunity for the next 5 years, Piedmont fits my risk profile. In saying that, we don't know how they would fare during production so it is very risky. Hence the straw is aptly named speculative.