Ann: Trading Halt, page-114

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lifefree

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20/12/22

12:42

Post #: 65381724
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Originally posted by Broken chair: ↑

Overall I'm happy with the Prarie transaction although as others have already mentioned we haven't seen the details to be certain that it's a good project. I think I guessed we were looking at a hardrock project in South Dakota - I was wrong on both!!

The big picture and vision are fantastic. Arizona is on the cusp of being a multi-project lithium business with four projects in the world's biggest market for EVs and ESS lithium-ion batteries. All the big lithium companies have multiple projects. Think Albermarle, SQM, POSCO, Livent. Yes, we're years of away from being anywhere near the size and market cap of these companies but we now have a plan and strategy to get us there. It's far better than just having one project. If Prarie has 4 million tonnes of LCE, then I'm excited. Big Sandy has 4 million tonnes, plus Lordsburgh, plus a 19 per cent share of Midwest Lithium. We could end up with anything here but it's going to BIG in my view (Donald Trump caps for emphasis).

Some of the question marks on the Prarie project that I have include:

1. Praire is a DLE project and notwithstanding LKE's market cap and confidence in the technology, there are zero DLE projects on the planet that are producing LCE profitably and at scale. Only bench scale and pilot projects, so let's see how this technology goes. I'm sure it will get there as there are too many clever people working on it -- check out Lilac's website -- but how long will it take and what's the cost? All unknown at the moment.

2. Grade and contaminants of the brine are unknown as other posters have mentioned. With brine projects it isn't just the level of contaminants that are important, but the types of impurities are critical in determining processing costs. Some contaminants are more costly to remove than others such as magnesium, iron and more.

3. What is often overlooked in brine projects and that is arguably more important than grade is head pressure of the brine. Does it need to be pumped to surface or does it flow to the surface under its own pressure? This is key in determining processing cost. Looking forward to finding out the details here.

Some posters have raised questions about that hoary old chestnut - the need for future capital raises after we use up part of the warchest on this purchase. Crikey, all small cap stock that don't have a cash flow do this. It's how small companies become big ones. Cap raises should be welcomed as it shows growth. Capital raises from issuing new stock to fund the Prarie purchase is less risky than debt funding particularly in the current environment of rising interest rates. We will all get diluted on the expanded share-register but we will have more projects and an extra 4 million tonnes of LCE that has an inground value of at least US$200 billion.

I'm not worried about more shares on issue. NAB has 6 billion shares on issue and no one bats an eye lid about this. And that may be a pointer on the direction we're headed. Snapping up lithium projects around the world is just how Ganfeng has gone from minnow to behemoth in a decade and I can't see that isn't a bad strategy for AZL to follow. All in my opinion and DYOR.

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First, learn how to spell Prairie and Lordsburg.

AZL Price at posting: 6.2¢ Sentiment: None Disclosure: Not Held
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Ann: Trading Halt, page-114

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Ann: Trading Halt, page-114

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