Ann: Quarterly Activities Report - March 2023, page-18

Not sure about the thumbs up on this one.

Permits
"As part of the regulatory process, the Company is now conducting notification meetings with stakeholders with a view to finalising the process and obtaining formal approval notice from the Mining Secretary. These works were slightly delayed, however formal approval receipt is targeted during the current quarter."

Ok, who are the "stakeholders"? JZ should be asked to define that at the meeting.

"The Company is awaiting regulatory approval from the Salta Province’s Secretary of Mining department for its Environmental Impact Assessment (EIA) for an additional 10,000tpa lithium carbonate production operation, who is currently processing the report."

Righto, they have been processing for how long? Frankly, they have processed the shite out of it and now we are bogged down in "stakeholder" consultation.

Strategic funding
"The Company is aiming for the strategic funding and off-take arrangements to be finalised to coincide with the 10,000tpa Environmental Impact Assessment regulatory approval (or near this time), and in the lead up to 2,000tpa lithium carbonate production operations."

See above re "stakeholders". Pretty difficult to get a tier 1 player to commit while we still have to consult with stakeholders.

Resource expansion
"Drilling operations have proved challenging due to inexperienced drilling operators, however the Company is targeting the completion of the final three exploration drill sites to be completed during Q3-CY2023."

Another donkey moment.

So drilling not until July-September quarter. That is the drilling, not the technical analysis. So that looks like we can forget about resource expansion this year. Let's hope the tier 1 party is as bullish as us on what the drills will find. Perhaps they analyse the actual data about the current operation that they have and make an investment decision based on the available material.

Cash burn
I see we are starting to burn cash now.

$36.6m in the bank down to $30.7m. $676k used in operations to justify a 45 quarter funding availability. Presumably capital expenditure for expansion makes up the balance. It's positive that we are doing some work in anticipation of additional 10k.

Tonopah
Argosy is reviewing its exploration strategy with respect to Tonopah, come for FFS, get on with it.

Conclusion

No thumbs up for me.

The operation is tied up in red tape and JZ and team are doing their best to do what work they can to assist with expansion, when it comes one day.

The share price will be sustained at the previous highs provided commissioning to steady state is achieved and we go into continuous production. I am less convinced that much more will happen in Salta in the near term. Instead of wandering around working on DAF etc., maybe the energy level being put into Tonopah needs to be reassessed.

I am still a buy at this level, but only on the basis of 2kt steady state. The market isn't going to give us any more than fair value for that until these major milestones are hit.