Price and Chart HIO, page-3980

I think CITIC pays $500 mil a year to Clive. That crazy amount. CITIC is still running the mine and recently signed agreement to mine further 1 bil ton. Imagine not having to pay $500 mil a year royalty, similar output to Sino but much better grade (Sino is 65% fe, we are 70%) which will attract larger premium, much lower cost base (in the lower quartile confirmed by Wood-McKenzie, also noted by recent independent reports).

Sino was able to make $1 bil profit last year selling 21 million tons 65% fe product, paying $500 million to Clive and with much higher operating cost. How much our profit will be selling 20 million tons 70% fe, no $500 mil royalty payment to sharks and with much lower costs (probably in the high $40s if we go with slurry option)? I expect it will be between $2-$6 billion per annum profit once in full production.

I did some exercise to compare the project economics of hot lithium companies not producing currently with over $1 bil market cap (AVZ, LTR, SYA, LKE, CXO, VUL). (Note I don't have anything negative about these companies. These are great companies as long as lithium price stays where it is now.) None came close to the HIO project economics, in terms of NPV, free cash flow, after tax profit etc. LTR was the only competitor but few billions behind in terms of NPV. Some of their IRR were better because of low capex requirement. After this exercise my conviction on HIO has gotton even stronger. I am not looking at short term volatility, stock market looks very weak at the moment. Short term price can go anywhere but over the medium and longer term, we have only one way to go that is UP as long as the management keep kicking the goals.

Good luck everyone.