Thanks for the stock picks guys (
@embkb and @mick25vp)
Anyone wants to talk to me about other stocks can email me
[email protected] or DM to @anatol414 through Twitter.
Let's get back to our KV project on this thread for a while again.
To understand the value of LTR's projects and its roadmap to be a lithium producer, we need to understand what LTR's peers are doing now and what kind of mistakes they did in the past.
Did you guys see PLS (Pilbara Minerals) anns yesterday?
"PLS Production and Sales Update"
It has dropped ~10% after the anns!
PLS (Pilbara Minerals) production is down.
Why?
PLS blames its Chinese offtakes partners!
Is that correct?
Or the real reason is that they have serious production issues (supplying SC6 spodumene concentrate) because of the plant design and construction caused by their collapsed contractor RCR Tomlinson? (explained as "continued rectification of RCR defects" on anns.)
Could the reason be Ganfeng and General Lithium (the offtakes partners who delayes their purchases from PLS) are not happy with the SC6 spodumene concentrate products of PLS?
PLS said on anns "Company has and will continue to engage with its other partners and additional industry participants with a view to growing its sales portfolio in the near term".
Why is PLS looking for other partners and additional industry participants to increase its sales?
Do they have a fear that Ganfeng and General Lithium will not buy their commitments from PLS? (while both of those companies have huge contracts with EV manufacturers)
The reason given on the anns was weird, and kind of not very much convincing.
They say demand for battery-ready lithium chemicals remains strong, but they lost production capacity.., they are blaming their offtake partners, and they will shut down the plant 2 weeks in June and whole month in July (6 weeks) for the production issues.
"
While underlying demand for battery-ready lithium chemicals remains strong, delays in the construction, commissioning and build-out of the Company’s offtake customer chemical conversion capacity in China has resulted in June quarter sales of spodumene concentrate being constrained".
"In response, production at Pilgangoora will be moderated during June and July with the Company utilising this opportunity to undertake continued rectification of RCR defects, complete further plant improvement works, and draw-down final product stocks."
Hmm...
There is conflicting comments on PLS anns.
They say "
We remain confident that the underlying fundamentals of the lithium market remain strong – as evidenced by the growing number of agreements being made by major car manufacturers further down the supply chain in both Chinese and global markets, to shore up lithium supply to meet their long-term EV production and energy storage market targets".
And they give the graphic below which shows steady increase over the months until this anns.
PLS's EPC contractor RCR Tomlinson who built the process plant with a lots of defects was put into administration on November 21 2018.
“The Stage 1 Pilgangoora concentrator construction with RCR is complete and they have no ongoing presence at the site,” Pilbara Minerals managing director Ken Brinsden said to the media but defects were there. They have to deal with them.
Now let's remember the graphic I posted on my post #:
38775844.
With Big 4
Without Big 4
I was saying;
"Any resources with less than 1.20% Li2O grade has problems of producing battery grade SC6 unless plant is designed professionally and built with high quality processing machines".
I know PLS is using high quality processing machines (bought from the best quality processing machine manufacturer)
However we can clearly see that PLS's plant has not been built professionally!
Also I am not sure if their processing plant staff is qualified and well trained to apply the correct processing procedures in the plant or they are cutting the corners for cheaper production!
Btw, the ave. Li2O grade of PLS is 1.27%. This is only the average grade, the mixture of low and high grade ore sections for calculating the total mineral resource. The processing of lithium needs constant high grades.
Blending of low grade and high grade is not working well as it was done in iron ore industry, not quite similar. It needs very careful and well planned process and production.
That's the reason a high grade resource has a very high value.
(20min delay)