Lithium Demand surge, page-889

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binwood

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21/05/18

16:39

Post #: 33237469
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Originally posted by ozblue ↑

KDR has not gone through the cap raisings it may need to do before the plant is up and running, nor the full DFS, with only the scoping study suggesting the mine construction starts in August 2018.

IMHO neither the timelines nor the costs will be met, so the company is likely to need more cash, just like Pilbara did at a similar stage.

KDR plan from the scoping study is for a 2 Mt/a plant, same as Pilbara stage 1.

Personally if I had shares in KDR (almost bought some about month ago, but price got away from me), then I would be looking at cashing in some based on Siva108's numbers. It makes no sense to me that KDR has a higher market cap than Pilbara after allowing for their 50% ownership.

But when did the market have to make sense??? It often doesn't, as those of us that bought a lot more shares when our SP was around 35c last year have found out.

KDR has a higher known resource standing at 7.03 Mt LCE, at a higher grade 1.5% than our resource, and this might be the current reason for an effective higher market cap.

Perhaps the situation will change when we get our resource upgrade and start sales of concentrate. The late resource upgrade, might also be what is holding our share price back (though I think it is for a good reason), with the market expecting the first plant concentrate to also be late.

From January presentation...." Expansion project is subject to further feasibility work (including infill drilling for updated Mineral Resource and Reserve in Q1 2018"...........

...........then by end of April in Quarterly............ "All exploration drilling data and drill hole results from the program are being compiled and will form the basis of an expanded Mineral Resource due for release in Q2 2018. This is anticipated to be followed by an updated Ore Reserve estimate for the Stage 2 Expansion project by mid-2018."

IMHO KDR will have a bit of the 'orphan stage' to go in the next 2 years until their plant is constructed and mining fully underway, while Pilbara is at the end of the 'orphan stage'.

I still see much further upside for Pilbara over the next 2 years, compared to KDR, though also think KDR has a great project and future, just because the overall market is still not fully aware of the speed of transitional change from ICE vehicles to EVs over the coming decade.

Expand

It still doesn't make sense to me either. They will have a 2Mt operation and half a refinery (which they need to fund - may get debt financing) by 2020/21. PLS will be 5Mtpa and 30% of POSCO refinery by H1 2020.

POSCO are funding our share of the refinery and I don't see funding issues for stage 2. There is no way that 20% extra ownership in a refinery outweighs 3Mtpa of spod. KDR holders talk about SQM expertise but hard rock is still a different process and I would argue POSCO expertise at least as valuable.

Insto's seem to love KDR for some reason though and still hold fair short positions in PLS. We just have to hit milestones and generate cash and the fact PLS is undervalued will become inarguable over time in my opinion.

PLS Price at posting: 94.0¢ Sentiment: Buy Disclosure: Held
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Last $3.11		Change -0.020(0.64%)		Mkt cap ! $9.365B

Open	High	Low	Value	Volume
$3.07	$3.13	$3.05	$43.80M	14.14M

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No.	Vol.	Price($)
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1	1000	3.090
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10	138720	3.060

Price($)	Vol.	No.
3.120	35606	14
3.130	136697	24
3.140	313303	19
3.150	411601	56
3.160	108909	12

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