The key points to take out of this announcement is how low the production costs will be. I can see this project being one of the lowest cost producers of lithium in the world. Which in turn means large profits on current lithium prices and lower long term risk if prices were to fall.
"Project operating cost places Maricunga among most efficient producers with lithium carbonate production cost of US$2,938 per tonne (/t) FOB in Chile, reducing to US$2,635/t with credits from KCl by-product."
This part here could have huge impact on the project.
"yearly royalties would amount to approximately US$ 3.3 million per year. This is equivalent to about 1% of annual sales."
Albarmarle might have a slightly lower cost price for their brine operations but they're recently new royalties of 40% in effect raises their costs significantly.
With Orocobre recent pricing of ~$14k pt as a sell price guide. Huge positive cash flow is possible. With 20kt production, $150M profit pa sounds like it's going to be a cash machine into the future
Looking forward to the PFS next year.
LPI Price at posting:
56.0¢ Sentiment: Buy Disclosure: Held
