On February 16, 2018, NMX.TO held its annual meeting. A themoneynarrative reader, Jean-Philippe, wrote a report detailing some of his thoughts, which we are pleased to share with other readers.
Several confidentiality agreements have been signed and several offers have been made by companies needing lithium. China, according to CEO Guy Bourassa, has a desperate need for lithium. One of the two very serious offers for financing came from China, but given the long period for acceptance by the Chinese government for this type of disbursement, discussions were aborted.
Another agreement was almost reached between the two parties before the end of 2017, but at the drafting of the final agreement several important details were changed, revealing the true nature of the company making the offer (no details were provided).
Mr. Bourassa stated: “We have chosen the path we want to take and the lawyers on both sides of the ocean are working hard right now.” It appears that European, Japanese or Korean interests might be involved, but China will be excluded.
The buyer of the 14.7 million shares that were sold on December 15, 2017 by Ressources Québec was an investment fund introduced by Mr. Bourassa, the fund now owning 6.2% of Nemaska’s shares as a result.
Mr. Bourassa seemed very confident and really well informed about all aspects of his business. He also said that overproduction is totally impossible in the short and medium term given existing demand. In the entire world, projects that can match Nemaska’s situation are extremely rare. He mentioned wanting to have a good deal rather than jump on the first opportunity to finally start construction.
Discussions with the Caisse de dépôt et placement du Québec occurred some time ago but it seems that they have not invested because Nemaska does not meet their criteria for a mining company investment. It appears that the Québec government will not be a participant in the financing.
A negative point: Nemaska management feels a sense of urgency. When a comment was made by Nemaska CFO Steve Nadeau that they blocked purchases of important equipment for lack of liquidity, Mr. Bourassa quickly took back the microphone.
All in all, Nemaska’s annual meeting convinced me to buy more shares.
themoneynarrative 