Ann: Updated Dynamic Modelling Works Produce Outstanding Results, page-43

"Consequently, additional productionbores and/or deeper production bores will need to be included to achieve Argosy’sproduction targets in the long term"

so AGY has to increase the number of bores from 6 to 19.......this is substantial!

This equates to higher Capex, as energy demand increases with more bores i guess..

Is energy an important cost factor?

taken from the 2018 PEA



energy is 13.2 % of Total. it is the second largest cost factor. so more boreholes might slightly affect OPEX, I assume energy is mostly needed to process the brine into carbonate..The reagent costs are the main problem....

but what is maybe more interesting from the announcement:

"The PEA showed robust project economics and a positive NPV for a wide range inlithium carbonate pricing and it is assumed costs can retain an effective operatingcost (as indicated in the PEA, with cost escalation factors to reflect present operatingcosts of current similar operation"

so what is a realistic cost escalation factor regarding the timeframe 2018 to Jan 2025?

this is what LAAC just published in its updated technical report:

"The operating cost (OPEX) estimate for a 40,000 tpa lithium carbonate facility has been preparedat the completion of the Project and using data generated during the ramp up. (Table 21.9). TheOPEX that defined by Exar at this stage is US $6,543 per tonne. This present cost is a substantialchange from the FS OPEX definition that was US $3,579 per tonne. The inflation and devaluationof the local currency affected several items conforming the OPEX including reagent costs,maintenance, manpower, catering, security, consumables, and product transportation costcomponents."

when was the FS published?
https://www.panorama-minero.com/es/news/lithium-americas-announces-40000-tpa-feasibility-study-for-the-cauchari-olaroz-lithium-project

Answer: 2019.

so we can apply the cost escalation factor of LAAC to AGY = 82.82 %

new OPEX of AGY: US $ 8491,989 per tonne based on the PEA 2018 adjusted with the above inflation factor.

Conclusion:
Everything leads to the assumption that the econmics at AGYs Rincon project will not work at the current low-price environment. Lithium prices will have to increase significantly to make the project attractive again.
Only a DLE route might save the project imo

dyor
peekey