Ann: PFS confirms potential for robust new long-life lithium mine, page-13

At a high level I gave my views in this post the other day - Post #: 41723618

A quick skim read against the embedded paost:

Basically:
1. Resource for PFS as I thought is at 50mt - this is what finds its way from the initial 75 mtpa to the proven and probable category for the PFS - been 50mt but looks like they are mining beyond 150 metres (hence why the strip ratio assumption stays close to the initial SS)
2. NPV and IRR slightly lower than I thought in my embedded post. 25% post tax IRR based on spodumene price of about US$700 per tonne for 6.1% concentrate (will be interesting how the market reacts, but I think it is a fair assumption, albeit I was using US$650 per tonne). Results slightly lower than initial SS, despite the PFS based on a 20 year operating life instead of 9 years under the SS.
3. Ore feed configuration at 2 mtpa per annum for 20 years as I thought
4. Strip ratio remaining at 7.7:1, instead of falling to 5:1 which is what I was thinking. Reason is at 1, and my embedded post. To get the 50 mt, they are going deeper hence why strip ratio where it is. But upside here as identify more resource I guess to 150 metres.

Upside:
6. Tantulum credits not taken into account.
7. Strip ratio will fall over time IMO as more resource is identified and/or ore feed configuration increases (economies of scale and strip ratio falls as resource is hit).
8. Hydroxide facility is where they need to head with this given the IRR of 25%, whilst good I suspect the market may not like that aspect, and it is a hydroxide plant here IMO that moves the economics to a better place given the price differential in hydroxide production to simply producing spodumene (i.e. if look at KDR/Wodgina and even of late Greenbushes all three are proposing dedicated hydroxide facilities, and even PLS is investigating that aspect as well).
9. Project economics can also move with a higher configuration than 2 mtpa ore feed as well, but a good start and suspect the DFS will have a different configuration and plant spec (probably one connected to a hydroxide plant IMO)
10. The 25% IRR is impacted in part by the 2 mtpa configuration. This will improve as will strip ratio in a higher configuration.

Will have a better read when I have more time. How the market responds will be interesting.

All IMO