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49 Posts.

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04/06/23

12:41

Post #: 68120327
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Originally posted by w27: ↑

I read an article yesterday, which said that the construction of manufacturing capacity for lithium-ion batteries has shifted decisively to the USA. Given the huge subsidies now available for EVs built with a supply chain reserved to the USA and its allies - including Australia, this is hardly surprising.
All this manufacturing capacity will be looking desperately for supply of materials, including spodumene to manufacture the lithium chemicals required. Most of the current capacity is committed to manufacturers outside the USA and the few favored allies. We must see a huge interest in any spodumene from the favored sources, including Australia.
Given the above, I put together a few figures, based on the recent scoping study, but using a proper figure for the assumed price of spodumene.
As far as I can see the current price of 6% spodumene has recovered to about US$4,000, and that is the forecast by the two best forecasters in the business. At current exchange rates that is $5,700 for 5.7% spodumene, predicted to be produced at Pioneer Dome.
These figures give the following simple calculation when substituted in the Scoping Study.

Annual Production 193,745 T
Cost of Production $1030 per T
Sale Price $5,700 per T
Cash Surplus per T $4,600
Annual Cash Flow $1,104,346,500

I might add that the NPV given in the scoping study was $367M with an assumed sale price for 5.7% spodumene of $1,500. If you slot in the more likely figure, you will get a figure at least eight times higher.
And all that has a market cap of $127.7

Just some food for thought.

i

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Hi w27

Do you mind linking me to the forecasts for 6% Spud at $US4000 per tonne long term?

I have been using UBS' forecasts for my calcs and they have it steadily decreasing from US$4000 per tonne to US$1500 per tonne by FY2029.

I would be curious to see the different assumptions that have led to such different forecasts, because as you correctly pointed out they have a huge impact on the value of this project.

Thanks

ESS Price at posting: 45.5¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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