Continued
I won't bore you with the rest of the day in Montreal, almost all of our idle chat was about Sayona, Moblan, BOD, other projects, Lithium in general.... we compared our thoughts and by and large I feel we agreed about a great majority of the topics... it was kind of like HC before some of our new guests arrived.
On Wednesday we had to be at the airport for our Flight to Val D'or ... we were out of the hotel and on our way to the airport by 6:00 am. It was a beautiful day, blue skies and everything was running on time. Last year I drove from Quebec City, to Montreal, and then onto Val D'or. Quebec is a beautiful place and even though it is a much longer trip, the car trip was much nicer than the plane. I did peek out the window on many occasions to see if I could see the scars of wildfires, but really I did not see any. In the US we had smoke for weeks on end, so I assumed there would be huge expanses of land that were charred, but at least on our flight path I saw none.
We were met at the airport by Sylvain Collard, COO of Sayona Quebec. Sylvain spent the entire day with us. He picked us up at the airport early and dropped us off late. Sylvain picked us up in a Ford F150 Lightning. As unbelievable as it might seem, this was the first time I have been in an EV in my life. Sylvan said it was the best truck he had ever owned. I was awfully impressed with it as well, a very well-made truck.As we pulled into the parking lot and could see the familiar forest green buildings that we have all come to know, I could already tell the difference.
First off there was an automated badge reader that you have to go through just to get your car in the lot and then once in the lot there were rows and rows and rows of cars, I would guess 125 to 150 maybe more. As we made it around to the back of the building the vastness of what was there last year and what was there this year was pretty evident. Many roads that were barely a road last year were widened and completely redone. Huge dump trucks driving along the roads and a fleet of other mining vehicles were in the lot and busy doing work. IT WAS A WORKING MINE, HOLY CRAP! I will never, ever be able to explain the pride I had as I watched what I had been dreaming would happen so many years ago, all unfold in front of me. To be there with Loui was the cherry on top, maybe he will have better words but for me I was just sort of standing in awe.
We spent about 2 hours talking to Sylvain prior to going to see the operation, of course there are many issues we want to know that he is unable to share, we understood this coming in and reiterated it while there. "If you can't say it, then just tell us and we will understand". I have picked some of the topics we discussed and Loui will share more because he and I were both asking a ton of questions.
We plugged the truck in and went inside the office. Inside we started with an intro. Sylvain came to Sayona from Iamgold. He has vast experience in operating a large scale mines. So why was he interested in Sayona? He was at an established mine doing very well and was well respected. He was attracted to Sayona for a few reasons, however I believe the biggest and most important reason for me, as an investor to know was, he wants to operate a chemical plant.
We questioned him about “why a half built chemical plant was so slow to ramp”? and “why was a technical study even needed, wasn’t it just a delay tactic by our JV partner”? Sylvain was diplomatic in his response by saying, “We need to do things step by step I can’t get to nameplate and build a carbonate plant at the same time anyway”. He also explained that there is a lot to be learned in those studies. He even provide an example from a previous project. Even if the study guides us to the conclusions that we believe it should there will be many details that will help Sylvain and his team build it with the least amount of issues. If for some reason it guides away from Carbonate and to hydroxide we will also gain valuable information. We have the time during ramp up to conduct those studies so Sylvain was very much in favor of them.
He is correct, he has his priorities in line, first NAL nameplate, 2nd Carbonate. I think once nameplate is achieved and he starts focusing on Carbonate, we may be seeing some time line changes, but for now he is only focused on getting NAL to nameplate. Sylvain also told us during ramp up his team worked day and night to ensure that production would happen on time. Sylvain is the face that we met, but he is quick to remind us that he is nothing without the men and women who dedicated themselves, to make sure objectives were met. If any of those team members are reading this article, I would like to personally thank you as well. He pushed his team hard to get there and as much as we loved the countdown clock, I am not sure he or his team was all that thrilled with it. .
I asked where they were with nameplate, I was looking for a number, he offered that they were progressing well and were on track. I asked more questions about the logistics. First off, they only have the capacity to store around 5000 tones on site. Each day they load containers with spodumene. Each container is 30 tones and they run 15 to 20+ containers over to the train yard daily. From the train yard they load the spodumene onto rail cars and deliver it to the port of Quebec where it is held in a large storage shed. They do not use the Trois-Rivières port at all. So, at any one time they could have inventory at the port, at the rail yard and at the plant. My best guess at production today would be around 13,000 to 14,000 tons per month and increasing. They need to get to 18,883 per month to get to nameplate. I am jumping forward a bit but this pic was taken on our way back to the airport. The blue containers are Sayona spodumene, 30 tones each and as I said 15 to 20+ a day 5 days a week. We watched as they loaded one of these and followed them to the railyard.
I also asked about Moblan again. Will you be ready in November? “Yes”. The DFS is managed by Manon Bérubé and the project Team, but Sylvain’s Ops team are well involved for the operation part. Maybe on a future visit I will meet Manon as well and start seeing the progress at Moblan. Everyone who speaks about Moblan, whether it is Guy, Sal, or Sylvain they all have a certain crazy energy, it is similar to the video when Brett first talked about it. IMO it will be big, likely 125 to 150 mt. I am pretty sure the timeline is the same. 1.DFS, 2. More drill results, 3. Resource upgrade, 4. DFS upgrade. STEP 3 and 4 are where I believe we will cross over into the rare air of 100+ mt. Those will take place next year and I cannot wait!!
We also spent some time speaking of concerns, not of NAL but of the other issues. I won’t go into all of those here because I think everyone knows the list. Sylvain listened and has started the ball rolling for us to begin other conversations. Those will take some time to work through but we hope they will go somewhere.
So off to the pit we go, jump in the truck and take a short drive to the pit. Just driving to the pit, I could see huge changes in the roads. Last year the roads were more like one-way streets, this year more like 4 lane highways, large 2-story tall dump trucks were moving up and down the road. In the distance waste rock piles were towering and mining vehicles of all sorts were busily doing tasks. The mine pit now has a viewing platform, I have seen it in other pics. It is a nice addition and allows for safe viewing of the pit and operations. The basics of the mine, drill, blast, remove from pit, repeat. The day we were there they had a blast scheduled for noon. We were in the offices at the time and never heard or felt it. I told Sylvain it would make my trip if he would let me blow something up, he for some reason did not feel I was qualified.
On my last visit to the pit, it was completely full of water. This time it was full of $$.
The have 3 phases that they are working on and the pit, as I looked at it seemed to have grown by leaps and bounds. Sylvain has worked at locations where this is a tiny pit, but for me it was quite impressive. When you look down and see a Ford F150 and it looks like an ant crawling around you know its big.
Did you even see the F-150??
We stood and watched as they loaded several dump trucks they size of a 2-story home, but looked like little tonka trucks from where we stood.
From there we went over to the ROM pad where they deliver the rock, it is stored in 5 graded piles. Don’t quote me on this but I think I remember Sylvain saying 130kt currently on the ROM pad, but it fluctuates week to week. There is not a lot to see at the ROM area, but you can see how the rock is sorted and the color differences between high grade, all the way down to the lowest grade.
We did not have proper safety gear to go near the crushing and ore sorting stations so we could only view it from afar.
Our next stop was the concentrator and chemical plant. Honestly, I expected the noise level inside to be much louder, don’t get me wrong it is loud but you can still talk and be heard. I recently went to concert and that was much louder. The rod and ball mill are the first things you encounter, they are giant drums that ore is fed into and either steel rods or balls are also inside. They tumble the rocks and metal objects causing the ore to get crushed into a size they need for the next step in the process.
The next few steps in the process are harder to see because the slurry is carried through pipes in the plant. There is a desliming process, and a scrubbing station and then it finally goes by the wet magnetic separator. The next visible area is where floatation takes place. Several large tanks with a sudsy frothy mixture. At this point the process it looks more chemical but it’s really just ore and water and some flotation reagents. The sudsy mixture at the top lifts the lighter particles (lithium) up and over in to a collection area. Think of it like a beer, when you poor a glass the foam rises to the top of the glass and if you are not careful, it spills over onto the table. In the case of floatation they want the beer suds to over flow the tank, they then catch them and what stays in the tank is waste. So, they keep the suds and throw out the beer.
There are only three locations that you can take photos at Sayona, 1 anytime prior to going through the card reader in the parking lot. 2. At the pt. and 3. in front of the ball and rod mills. I have provided what I was allowed, but this video from Sayona does show quite a bit of the process.
From there the is a dewatering process and the final product rolls off into a bin. The product is moved from the bin to a storage / loading area where it is placed into containers on a truck and finally moved to the train yard in Val-Dor. It is a continuous process, 7 days a week, 24 hours a day 365 days a year. Sylvain did a wonderful job explaining each area of the plant as we moved from station to station. We did our best to figure out how close we are to nameplate. We knew going in there would be some things we just would not be told because they have to be communicated properly. Therefore, you sort of have to do your own estimates based on what you see and use a bit of logical thinking. Our best guess is around 20 or so trucks with 30 tons each going to the rail yard per day. Trucks only run 5 days a week, so our best guess would be somewhere between 13,000 tones to 14,000 tones per month. We spent a total time in the plant of maybe 2 hours tops so our numbers are rough and based on what we saw during just that time. Regardless of whether our estimate is too high or too low I think we are at least +/-15% of that for sure and we still have 5 weeks to the end of October. I think we will be darn close by then.
The whole trick of getting to nameplate is eliminating extended downtimes. 4 hours seems to be the critical area. After 4 hours they lose the suds in the floatation process, that drops recoveries down from the high 60’s and low 70’s percent range to recoveries in the low 50’s, in order to get back to where they were it can take up to 48 hours. Downtimes are part of the game, you will never eliminate them, but having the correct processes in place to overcome them quickly is what is needed. Think of it as a NASCAR pit crew, they need to be as efficient as possible to overcome the issue.
The first step is detection, they have a control room that has maybe 20 computer monitors, each station is monitoring aspects of the plant and giving a constant readout so they can see when and where issues are happening even before they are a true problem. If it is a known issue, they will already have a team who know how to deal with it and they will be dispatched to make the fix. If it something they have not encountered they have to diagnose and come up with a plan quickly on how to overcome these issues. This is where having employee who worked in the facility in the past and know the history and how they dealt with it really shines. We have a lot of knowledge on staff and most problems can be dealt with quickly. They still do have downtimes over 4 hours which they will overcome.
The last area we entered was the carbonate plant. Other than the fact that it was cleaned up over what it was last year, it was as I had remembered it. I will remain as fervent as ever that this is way more than a half-built carbonate plant. This was Loui’s first time seeing it so I will let him speak to what he saw and felt since you already know my opinion.I know I joke about a half-built plant a lot, the fact is there is a lot of equipment there and seemingly only a few holes, so from my viewpoint it is much more than what is represented. In speaking with Sylvain he tells it like this. The plant was built in 2011 but some equipment has not been installed or has been removed from the initial scope because the previous owners did not have the finances to complete. They did operate the plant in the past but it never worked properly. So, I guess the argument of half-built is really irrelevant, what matters is what is there will not work and we have to make changes to it to make it work. I fully trust the Quebec team has identified the issues and will make the appropriate changes to make this function at a level we will all be very proud of.
After visiting and seeing first hand the NAL plant in action, I can say without any pause or doubt that this is already a success, it is churning our $$ day in and day out, they are working very diligently to get to nameplate and I have no doubt they will be there soon.
I wish that each of you could do a similar visit and see with your own eyes what is there and how our investment is doing.
My trip log and in the coming hours Loui's as well will hopefully help ease some of the tensions we have all been experiencing.
GLTA
Split
(20min delay)