AVZ production, page-91

No one is doubting that AVZ will have higher ('significant') transport costs compared to peers like AJM. Everyone knew this buying in. I'm sure everyone that invested in BGS also knew it (Yes, BGS has high transport costs at $95/tonne...I'm trusting their revised numbers down from $173/tonne for the purpose of this discussion btw). I also remember BGS holders getting hammered on this issue in the past (just like AVZ is now). In the end, it looks like the low onsite cost for BGS will make up for their high transport costs and make them very competitive (even more so than AJM). Same deal IMO for AVZ who has an even higher grade and far more homogenous deposit and unlike its peers has a potential tin credit.

A few more points,

* Even the old, more expensive BGS PFS figures would of made BGS very profitable with concentrate at $900/tonne. Being cheap is about potential future proofing and as a result attracting investment capital to build the mine. I don't believe concentrate prices will come down much anytime soon (lithium oversupply is not convincing). So first up, the lithium sector right now isn't a cutthroat market. There are huge profit margins currently.

* Road 617 wasn't ever built specifically for AVZ. It was for the entire region and existed long before AVZ arrived. Its still very much need to open up the region and bringing items to Manono but I don't think it will be used for hauling concentrate. The transport option utilized for the concentrate will be the most cost effective one.

* The minimization of handling (I remember BGS was going to use 2 tonne bags and lots of handling originally) is clearly important. Currently, the best solution I see is that the original rail line from Manono to the river (45km) is refurbished and rail takes the concentrate to the river onto a rail barge. 150km north, it releases its rail cars back to the main rail line which is linked to any port including the east coast of Africa (btw BGS boat to China has 8000km or so more of travel rounding Africa). There is no handling of product between Manono and the sea port of choice. Some sort of bottom opening dump car design would speed up unloading on boat. Who knows but limited handling is important as you say.

* $100/tonne credit is massive! It's the entire BGS transportation cost and 1/3 of the total BGS production cost. The figure is a very rough estimate where I round down heavily. Basically, 6 tonnes of ore for every 1 tonnes of 6% concentrate contains, at 0.1% grade, 6kg of tin. At $27/kg, that's $160 of tin. I'm assuming you could get $100 of this. Yes it all depends on the economics (added plant costs, metallurgy) etc but its still an option that other folks like BGS and AJM do no have.

Anyhow, BGS is a good example of how a high grade mine in a lower labour cost jurisdiction (low onsite costs) with high transportation costs, can still come out cheaper than its hard rock peers.