Agree
Understand it was a legitimate question, as you are a TA based investor by the looks of it, and to be frank, I am surprised by some of the commentary directed at you in this regard. For the next time, you cannot do a DFS unless you have an idea about the proven and probable reserves to support your DFS claims.
I think I am going to have to put this into context. Before we get some saying why only 94mt in the proven and probable reserve category from a 260 mt measured and indicated resource. The answer is relatively simple, if you can work your way through the pit design in the DFS.
You only do a a proven and probable reserve calculation, i
n part, based on your expected mining 'footprint' in a DFS, which requires the evaluation to be done on how the ore body will be mined and the depth of the pit to get you to the ore required for your 20 year minelife. This is what IMO they have done in the DFS when you read the comments in the DFS which focus attention of calculating the reserve on pit design, not resource area in its entirity of where the measured and indicated resource has been calculated. That is my view on reading and interpreting the DFS - so if others have a contrary view based on their reading and facts on reading, please share
The point - the proven and probale reserve doesn't take into account the extent of your measured and indicated resource calculated IMO.
The more interesting aspect I found when going back to the DFS is the following comments and I will explain some where I can:
1. Page 56 of 163
Keys issues:
1. AVZ needs to go deeper to get to the resource and the 'pit floor', where the lake was, in the costings is basically considered as waste (i.e. read cost savings in the pit floor in future) from meeting the objectives of DFS of enough reserves for the mine to operate at 4.5 mtpa for 20 years).
2. Page 58 of 163
Statement and the two pages before that say why as well
3. Page 112 - 113 of 163
Comment:
1. The above is self explanatory
Below, you are going to say what the hell is Scarpa putting a copy of this Table for from the DFS:
The answer is read the attaching paragraph. The other thing to note is your pit design doesn't have to go as deep - look at your ROM feed with a wedge - up 46%, but with only a 4.5mtpa means you don't have to go as deep in your pit design IMO if wanting 20 year life, or you extend mine life by another 9 years, i.e. read higher proven and probable reserves.
Page 114 of 163
Further optimisation in DMS recovery - but needs further testing as stated in the DFS (an ore sorting unit that is), and if successful will further increase proven and probable reserve in the pit design . Benefits below if can be used from the DFS:
Page 121 of 163
My comment: refer my preliminary comments above
Page 129 of 163
Importance of the above - well given the very low strip ratio here, and pit design, they are actually going quite deep because of a few things, firstly by not doing drilling in the the pit floor is considered waste for one. They also haven't optimised the process as well and are producing DMS product btw, which probably impacts teh grade of ore used (i.e. higher grading been undertaken when reaching the pegmatites themselves). And still with that the outcomes in the DFS still are positive, albeit reliant on the spodumene price assumption, which I won't repeat my post of today again contents. Others should just have a read of that if not sure what I am saying - Post #:
44548333.
All in all, provided spodumene prices improve, a lot of upside here IMO. The more you read the DFS the far more detail you see in it compared to other DFSs I have read, and the upside you can see (albeit the spodumene price a key to unlocking this value because to repeat, if spodumene prices stay where they are in effect saying the underlying EV forecasts to 2030 have been delayed etc etc (which then impacts AVZ's entry to market and obviously spodumene price improvements etc etc).
And obviously without EV sales going back to pre-COVI 19 forecasts on the growth trajectory to 2030 other potential greenfields players are also equally affected, notwithstanding existing producers could find themselves in a world of pain if prices remain soft for the next year or two.
Some blabberings, peering through teh empty pit floor of my VB stubby.
For avoidabce of doubt, the screenshots are from the DFS itself.
All IMO IMO IMO
