GXY 1.22% $1.62 galaxy resources limited

Galaxy game changer

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    The real game changer for Galaxy is to produce lithium chemicals directly from SDV and James Bay, rather than via a third party converter as it is currently the case with MTC. This will be more appealing to big battery manufacturers. This will also generate significant cash flow.

    Our CFO, AR, mentioned in one conference 2017 that Galaxy held discussions with large car manufacturers about lithium supply especially from SDV. One has to ask who are they:
    -Tesla will obviously be at the top of the list since Galaxy already has a supply agreement with Panasonic that provides Tesla with batteries.
    - Volkswagen which is expanding their operations with different models and more units from 15m to 25m.
    - BMW, Mercedes and many others.
    - Ford if it enters the race in big way, SDV and James Bay will be closer to their plants.

    Posco will be an interesting one since there are a lot of synergies between the two companies when it comes to SDV.

    Wesfarmers might be looking at Galaxy and its operation at MTC and they made no secret that they are looking at six lithium miners. I am not suggesting to takeover the whole company, but could be interested in supply agreements to utilize their chemical plant in Western Australia.

    Lots of options for Galaxy that owns world class mines that produce a future product like lithium.

    We have been looking for the inflection point to change share price direction and I believe we are in it

    1- Trade deal is month away and the market reaction yesterday was reassuring that a deal is possible.
    2- The Labour Party looks like the winner in the upcoming election and its policy will be supportive of lithium and green environment/ electric cars.
    3- Abbot said Australia could go back to car manufacturing ( electric).
    4-Tesla raised the cash necessary to boost production and so LPD.
    5-Volkswagen is on a mission.
    6- when you see big players are putting takeover offers to beaten up companies, you know that they have done their maths and we have reached the bottom of the cycle.

    It is no brained when you read and look around to see a great value in Galaxy and since my hand is getting sore from writing, I will stop here and say:

    Go Galaxy Go. My thoughts only.

    Cheers, Sydney
 
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