Welcome back buddy. I was wondering when you would pop up again. OK, I'll bite.
Your second paragraph in assuming that worldwide consumption as measured by LCE will remain at 200,000 for the foreseeable future is reason enough reason for me to disregard your remaining arguments, but for the benefit of those that read these threads I will continue with my critique of your post. The amount that you have selected, slightly above the expected 2016 consumption amount, can in no way be extrapolated for future years. In doing so you are suggesting that consumption will remain stagnant, Tesla, Volkswagen and BYD and all the others will refrain from building their gigafactories and associated lithium battery consuming entities do not ramp up production. That's what I would call a grandiose assumption.
Taken from a recent PLS presentation, the Roskill forecast of consumption as measured by LCE shows a constant increase YoY. Assuming on average increases in consumption, 350,000t will be annually consumed by 2025. Assuming significant growth in annual consumption provides an annual amount of close to 500,000t. A 150% increase over the number you have used in your argument.
Brine has and will continue to suffer setbacks in production as has been the case for the last several years. As an example, ORE has encountered many setbacks with it's Olaroz project which is still not operating at name plate capacity. Concerns in the quality of lithium produced and problems in the production process between the ponds and purification continue. Many of the other brine producers too face similar challenges so I would not be expecting them to make a significant contribution to total supply for the next few years.
Your assumption of a $600 price, whilst being reported as the average price miners are locking in, may see significant revision in the future. As per the recent DFS analyst conference call, it was noted that a spodumene price of $537 translates to a LCE price of between USD9,000 - USD10,000. Considering that LCE is currently trading at USD20,000 the prices are trending significantly higher than what is currently showing in the spodumene prices. I would expect revisions over the short to medium term.
It was the point that you were arguing strongly that really made me chuckle though. I'm trying to understand how or even why you would relate annual consumption (which you have wrong anyway) to the total value of the Pilgangoora deposit. Wow! I was just gobsmacked at that comment. I would be interested if you could elaborate on this point because I would love to hear your rationale.
We are at the beginning of a multi-year boom and the Pilgangoora resource at 60Mt has a life of mine value of $9.23B. Assuming that both inferred and indicated are correct and we have a total resource of 120Mt that increases to $18B. Keep in mind that these figures are based of a spodumene price of $537. I'm fairly certain that many a company would pay handsomely for a deposit the size of which we have.
The point on water, has well been discussed as you would well know. As per the DFS, it reads
"...Detailed negotiations are nearing completion to take water, under agreement, from an existing licensed remote borefield. In addition, access has been obtained to existing high-flow bores in the near vicinity of the project area. It is anticipated that either (or both) of these options will be sufficient to supplement the on-tenement supply and satisfy the project’s total water demand for both the 2Mtpa and 4Mtpa operations..."
So no, I cannot see any problems with water. Progress is being made as has been noted several times on all fronts including environmental and native title etc. The mining title will be made available in due course.
I find your comment ragarding the volatile nature of the minor metal markets interesting. If Lithium is as risky and due for an eventual correction, then why is MIN so determined in building a processing plant as well as obtaining feed stock to run it via Pilgangoora? Considering that MIN has their fingers in many a pie, wouldn't it be better for them to leave us to our own destruction and focus on areas that supposedly have a much higher value? I haven't see you comment on the MIN threads in a negative manner. Surely if the lithium space was as unattractive as you suggest, there would be many people posting that the acquisition of Wodgina was a mistake and the continued hostile actions undertaken by MIN to acquire PLS concentrate an outright screw-up. Odd, isn't it?
I thought the DFS was written well and provided all the required information. I haven't seen the ASX reprimand PLS nor did I hear the analysts in the conference call question why said financial assumptions were missing. If you would be so kind, could you provide me with several DFS examples that meet your strict expectations? Thanks
Losing Money? I wouldn't call it losing money. Every company that is in exploration and makes the transition to producer is required to spend money on infrastructure and services to get it into production. This is not a bad thing but a fact of life. To critique this is laughable as I know of no other way. Should you know of a way an explorer could make the transition without spending a single cent I would be interested in knowing how. Again, if you could provide notes on how a one can build a company on 'sunshine' and 'happiness' i would be more than keen to hear.
You've wasted an hour of my time in replying to a comment that has so many holes in it I could have used it to drain the pasta I had for dinner tonight. If you decide to write another post please ensure that you make an effort to highlight areas that are worth discussing and not simply make comments in an effort to cause fear or confusion. Chao buddy.
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