I must confess
@Wary 1 that I am finding these Quarterly earnings call transcripts incredibly helpful and interesting. Unfortunately I'm one of those people that read something once, and then miss so much valuable information so I know I must go back and read it again.
Of particular interest has been the responses provided to our good mate Rahul Anand of Morgan Stanley fame.
He does ask some very good questions, such as the one below.
But it's the answer that Anthony gave that is worthwhile considering when thinking about who our JP Morgan partners might be... These guys clearly have a massive demand gap that they are wanting to fill using Sal De Vida - Did you get that impression also Rahul?
Over to you mate...
Rahul Anand
Just one from me as a follow-up.
On Sal de Vida, that exploratory drill hole, just wanted to -- or a couple of them, just wanted to understand the nature of the work? I mean, I'm not sure what the depths of the previous holes already in existence were. But
as far as I understand, there's plenty of reserve life there already. So just wanted to understand the drivers for this? I mean, is it mainly to understand the depth of it or the geology? Or
is it perhaps part of the POSCO transaction whereby you're trying to define as much exist with you guys already? Just a bit more clarity would be good.
Anthony Tse
So Rahul,
we sold the resource in the northern tenements for $280 million, which implied a measured and indicated resource value per tonne of about USD 177. So clearly, kind of the resource on that Salar has a marked kind of value -- intrinsic value in there. I think there's a couple of things. I'll talked about the strategic side and then hand over to Brian. From my understanding, there's a certain depth that we drilled previously, which Brian will talk about in a moment, and then we're looking to go a lot deeper. From our perspective, it's twofold.
Firstly, I think we recently just sold 1.5 million tonnes or whatever, 2-point-something million tonnes of total resource to POSCO in terms of the transaction that we announced back in May. We think that the resource actually has -- or those properties that we have in the south -- this actually had nothing to do with POSCO, so all of that drilling is actually down in the southern tenement.
We'd like to think we could potentially be in a position where could basically recover what we've essentially just sold to POSCO in terms of volume in a very short space of time and with a very de minimis amount of exploration expenditure, that's the first thing.
The second thing is through some of the interactions that we have had with our strategic parties, I think there's a genuine level of interest to look at the longer-term potential because obviously, some of those parties also recognize that Argentina is in a much better spot competitively in terms of production cost versus probably some of their neighbors in Chile and definitely, compared to the hard rock plus converter kind of facilities in Australia plus China. And so
some of the questions that we have had from the strategic investors is, why is the number 25, i.e., why is the number 25,000 tonnes per annum? Could it potentially be 50,000 tonnes per annum in terms of what one could end up producing out of Sal de Vida? And so it's probably --
on those two fronts that we have been thinking strategically in terms of how much near term and very kind of low cost potential is there for us to actually unlock from the Sal de Vida resource. So that's kind on the strategic level. I'll hand over to Brian probably just to probably cover off on some of the kind of technical detail of that exploration work.
---snip---
How's that?
