Yes it will @Jacko22
I've lost track of how many times I've said it let alone a number of others. Long ago, I even put up some form of estimate based on PLL SELLING its 50% LoM OTA back into a JV owned refinery ... the numbers get squirrelly.
Think about it. PLL owns "title" directly over 25% and has purchased 50% ... argument would go along the lines of PLL 25% ownership is probably priced at "transfer price" along with a third (i.e. 25%) of SYA's 75%. There is 50% of NAL production going into the refinery. Then there is the 50% that PLL has purchased via its OTA with SYQ at SC6 ceiling of $900 DAP Cherryville ... its LOM but preferentially delivered to JV owned refinery --- but says nothing about what price PLL would sell it ... other than why would it not be market? Then of course its JV owned ... well say it was only 50% JV owned ... then PLL's obligation would be 50% of the 50% OTA .... so another 25% of production.
Look it is complicated. I've done my homework and I belieive I have a reasonable understanding of how IT MAY WORK. There are plenty of variables that change the outcomes somewhat ... what you have to first overcome the LoM OTA hurdle and what it means.
I'm sure we'll have plenty of visitors with their BS. My answer in advance is I DON'T CARE. What I think I'll just accept, is that their views are "poisoned", and simply formed from a deep desire for PLL (and KP in particular) to fail and somehow (magically) SYA gets to scoop up assets off PLL's balance sheet for "free". Little to no thought, research or analysis. And they will throw the personal barbs at KP, positive PLL posters ... calling us liars (best). KP goes to jail for stock fraud if what he has said is not true (e.g. the OTA is life of mine and it does not magically go away with a downstream decision). He has not said anything about how it will change. Like I said, I could care less.
Investing is a bit like the game of "Survivor" - Out Wit, Out Play, Out Last. You tell me how do PLL and SYA compare.
FWIW ... the full transcript of the section
(HK) Okay. Going back to Carbonateat North American Lithium, what's the process there? Some thought among Sayona shareholdersthat your off-take agreement magically goes away if you pursue the carbonateplant. You sounded pretty positive in some of your commentary about theprospect of that. But what you describe and help viewers understand whathappens to the offtake agreement if you were to do carbonate and what thelikelihood and timeframe frame thought process on doing the downstreamcarbonate plan?
(KP) Listen I'd say 110% ofeveryone's focus right now is getting the concentrate plant up and running, andramped up. And the team is doing an exceptional job and that's really whatthey're spending all their time on. There's some drilling going on. There'sgoing to be more drill results come out of that project. The best results inits history were announced several months ago. Hopefully there'll be some moregood results there. This it's a big ore body. I think it'll get bigger. Theymight make it bigger and better. So, there's some interesting stuff happeningthere, but fundamentally it's been all about the concentrate plant. Andsecondarily, thinking strategically, what do you do with - there's a kiln nextdoor - there's a building attached to the concentrate plant where you couldbuild a carbonate plant, you could build a hydroxide plant, you could dodifferent things. We've done a lot of studying of them. Fundamentally, thecapital requirements are significant. Neither of us are in a position to writethe kind of check required to build that right now - but I think we're bothbeginning to think about whether someone else might help do that. But there'sno process underway to seek that partnership right now, but I think it'ssomething, we're beginning to talk to the folks at Sayona about it. And I thinkwe're all interested - in terms of the offtake agreement - with the offtakeagreement, the offtake agreement is life of mine. What the offtake agreementfundamentally says, is that the material underlying our agreement would go to ajointly owned chemical plant - if there is one. So instead of us taking ourmaterial and selling it to our current customers, we would let those customerrelationships or contracts kind of run their course. But beyond that, ratherthan renewing those relationships with third-party customers, we would sell thematerial into the jointly-owned chemical plant. But the offtake agreementitself would remain in place. So that's, that's a life-of-mine offtake. I thinkthere's a general, a broad misunderstanding, of how that works kind of in themarket.
(HK) Okay. But yeah,fundamentally a decision to do carbonate, is a unanimous decision betweenyourself and Sayona to go ahead with it and you would make your own calculationon - do the economics make sense for Piedmont.
(KP) Yeah. It's a joint decisionfor sure. It's a joint venture. We have 25% of the JV, but certain important decisionsrequire a super majority vote or essentially requires unanimity. I think we'reunanimous that if we could avoid significant transport costs, and they aresignificant, and it's not just us - it's projects around the world - dependingon where your end customer is - you have to get material into a port, and thenyou have to get material on a ship to your customer. And at the end of the day,transport costs into China from Quebec or from Brazil are higher than theywould be if material could be converted, say, locally. It's a big savings. Youlook at the studies, some of the others have published about what it costs justto get material to a port in Quebec. It's $100 plus. It's not as bad for usbecause we're closer to the port, but it's a significant cost. If we couldavoid that by converting locally, it's in everyone's interest for sure. It justmakes the spodumene operation - which is all we have right now - it makes thatoperation meaningfully more valuable. In rough numbers, if you think abouttransporting material from a mine site in Quebec to a port, and then takingthat material all the way to a customer in China, you're probably circa acouple hundred dollars a ton. If you're producing 200,000 tons of spodumene,that's $40 million a year spending on transport that you wouldn't have to spendif you converted locally. It's a big number. It just has a massive impact onmargins. Whether we build a carbonate plant on that site or someone else buildsa carbonate plant on that site or locally - or a hydroxide plant for thatmatter - it's something I think we need to look at. And again, the focus hasbeen appropriately on ramping up the mine. And that's been a more than afull-time job. It's a big heavy lift and the team is doing a great job. But youknow, as that's as that process is coming to an end here this year, it's timeto really think about what the downstream opportunity is. And, and we've allknown forever, Quebec has a lot of positive attributes in terms of a supportivegovernment, really low cost, clean hydroelectricity and abundant spodumenesupply. And when I say abundant, the only producer is us, but there's otherscoming. But building a significant downstream business in Quebec has always beenstrategically interesting to us and we know to others. And NAL is the rightasset to kind build it around.
(20min delay)
