Gcar - we all know of POSCO over paying for GXY's tenements. This is the only major brine deal isn't it?
Anymore anyone can cite? 1 deal in M&A space doesn't set a trend or set the market on fire does it - which is what I am trying to say but you wish to twist one sad deal into some bright light for Agy and Li brine that's your opinion.
What you have is ALM, SQM, Tianqi and possibly Livent - who are traditional brine producers moving into and buying up Aust hardrock Lithium assets (Also Wesfarmer-Kidman deal). Multiples deals worth multiple billions - that's what sets a trend and heats up the market in the spod space. But that's besides the point, it just an indication of the M&A climate which Agy isn't part of.
POSCO building 2 plants? Not quite - its actually only building a pilot plant starting next month with FID on commercial plant to be made in 2021. Still in its very infancy. https://www.argusmedia.com/en/news/1945392-posco-to-start-on-argentina-demonstration-lithium-plant
Agy is an aspiring brine producer and yes i know margins are great for brine producers and I have quoted ORE's latest financial numbers - so yes I do know abit about what we are discussing here. ORE in FY19 operated at near 60% EBITDA- forget about selling the story of Agy's strength in BG production. Just answer the question on what Agy expect margins to be. According to Agy's 10,000tpa PEA its as follows - based on USD13k per ton LiCo price and opex of USD4.7k per ton, margins are around 61% - just take a look at Agy's own PEA below.
The PEA was done for a 10kt pa plant - so now going down to 2k tpa plant you would expect opex to be slightly higher due to loss of economy of scale. But that's fine just take it at 10k tpa numbers with EBITDA of 61% as presented in AGY's one PEA - my question all along which no one here can answer or most know its really just a farce - why does Agy keep selling itself as some great BG producer - but Agy has absolutely no financial advantage over ORE in terms of margin earnings?? ORE in the real world is producing margin earnings of 60% but going down to around 45% in June quarter due to Lithium price drops - which if Agy bothered to update its PEA , it will show the same USD4.7k or higher opex and much lower LiCo prices with the recent price drops.
So really the entire premise that Agy has been sold on - that Agy has great IP in BG production capability - I have mentioned before and will say it again - there is no financial advantage with what Agy is doing than other brine producer - it has been demonstrated by ORE's latest results and also shows why Agy has had such a hard time attracting capex funding and offtakes partners. Don't let the farce about poor Lithium sentiments continue to be an excuse narrative - see it for what it is - investments are going all around just not with Agy after 2 years of searching. There is a reason for everything whether you choose to believe the story the company sells to you or not.
8c to 10c is fair value for a 2000t pa operation which i have explained in my previous posts and unless there is some miracle left field news - we should be hanging around this sp range for next 12 to 18 months IMO
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