What a time to be in the Stockmarket. Watching the lithium wars is so thrilling to investors that one can only get some popcorn sit back and watch in excitement. This article focuses on CATL, because of the actions they took trying to outbid Ganfeng for Milllennial Lithium, allowed ZIJIN to buy out Neo Lithium in the crossfire. CATL’s actions has left them without a viable lithium project.
The bidding war between Ganfeng, (Contemporary Amperex Technology Limited) CATL and (Lithium Americas Corp) LAC over Millennial puts in perspective what these big boys are looking for when evaluating the importance of a lithium deposit. No one would have bid on Millennial to begin with if it wasn’t important. These three fighting over a lithium deposit and getting into a public bidding war makes things even more clear that Millennials deposit was important.
You also have to take into account that in the crossfire, Zijin paid $6.50 for Neo Lithium ($NLC / $NTTHF) as CATL was shooting for Millennial Lithium and believing they had Millennial, they dropped NLC. Click here for executive summary concerning the ZIJIN offer.
So what is really going on here, what are the take aways.
Well for one, we should all start looking at what Millennial had to offer. The contents of their mine and mine life had these three companies going at it, we should see if we can learn something, why the big fuss and then use Millennial as a comparison tool.
We have CATL the largest battery maker on the planet, Ganfeng Lithium the largest lithium producer on the planet go at it. These two titans slugged it out and then out of the blue a third entity emerges, a Ganfeng partner, a company Ganfeng owns 51% of; Lithium Americas Corp (LAC). Lithium America just tossed a chair into the battle, took out CATL and taking out its partner Ganfeng in the short term, an absolutely amazing strategic play when you see whats happening in Nevada at LAC’S Thacker Pass project.
Now what can we get from this.
When you look into CATL’s deal with NLC, we should look further than the monetary value and look at what they had requested as part of the deal. CATL requested a member on NLC’s board and boots on the ground, according to public disclosure all the board members voted YES to sell NLC too ZIJIN.
CATL was awaiting for their bid on Millennial to become an acquisition after certain timelines expired but if all the NLC board members unanimously voted yes to Zijins buy out, that would imply CATL also voted YES for the ZIJIN acquisition of NLC and as of right now this puts CATL in a bad spot.
So whats CATL’s move now, the counter bid for Millennial expired on the 16th of November, therefore CATL’s legal prescription to make a counter is over.
Zijin owns NLC as of right now.
CATL has no lithium project, unless NLC’s retail investors vote NO and win the voting process, therefore annulling ZIJIN’s offer. This would require greater than 66% of retail voters voting NO.
Voting No and winning would save CATL and we, the retail investor, would once again have a diamond of a stock in NLC.
Now, what if the retail investor did not take the time to vote NO and ballots were left on desks, on the kitchen tables, thrown in the garbage – what if the retail investor losses the NO vote and ZIJIN is truly the new owner of NLC; this would mean CATL would need to find another Junior Lithium Miner.
CATL moving away from NLC was a bad move from the start, I’m sure Waldo Perez isn’t happy right now, seeing how NLC has acted, everyone losses in the process including everyone in the company, a company with a deposit proven over 50 year mine life, with Blue Sky 99.9% battery grade lithium, lowest Capex, tons of water for the evaporation brines with high elevation, cash on hand, positive earnings of 14 million pre construction and Worley on site ready to construct.
The take away from this article is we might have another huge lithium play at hand, all we need to do is follow CATL and their next acquisition.
We should also understand what attracted CATL Ganfeng and LAC to Millennial. We should use that knowledge comparing other deposits too Millennial and then there’s the unfolding story of the Neo Lithium, as we await the retail investors vote.
Watch for our next article on Arena minerals as we compare it to NLC and Millennial and get an in depth analysis of its importance to Ganfeng and LAC.
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