Hey SQE,
This link should help:
https://rocktechlithium.com/lithium-conversion-table/Need to get from 60,000t grading 4% lithia (Li2O) to lithium carbonate(Li2CO3).
If you assume 100% recoveries (which is bold), it's 60k * 4% * 2.473 = 5935 LCE
P1 will do hydroxide, so it's then * 0.88 to get to a hydroxide number of 5223. Give that a recovery of 95% and you're at 5000t of LOH.
Heres my thoughts on today's quarterly. Mixed bag to me:
Good:
-There are two opportunities to reduce capex and opex in the P1 feasibility study. These are the incorporation of LOH-Max and a possible alternate location for P1 to be built
-We should know more details about one of these improvements (the location) in the next two months.
-There are negotiations being conducted for consumables and by-products in the alternate location
-The new engineering design will take advantage of the data from the pilot plant’s operations
-There will be more drilling at Alvarroes, which will hopefully lead to a more optimised pit design and improved mining costs
-Proposals for the Engineering for the mine concentrator have been received and should be awarded in June, meaning the cost and design of that will be known by September
-The residue work seems to have identified broader applications, as they are going to do another round of work to find industrial applications for the stuff. Potentially this is to maintain the zero-waste facility status even if they decide not to build in Sudbury, as Sudbury was somewhat unique in having landfill that could use the residue as a remediation product.
Bad:
-The revised engineering for P1 won’t start until June, and will take 4 months, meaning the feasibility study won’t be delivered until October at the absolute earliest
-The location of P1 is subject to revision and Sudbury may be dropped
-The mineral reserve won’t be delivered until August, as more drilling is scheduled
Ugly:
-Unless they have seriously shortened the construction timeline (12 months to build, 3 months to commission and ramp-up), there is no way they will meet their goal of commercial production before the end of 2020. Best case now would be January 2021, more likely to be March
-At current cash burn the team will make it through the June quarter, but will need to raise money again by September at the latest. Previously I said June quarter, but I forgot to account for the higher level of expense for the pilot plant construction. That won’t be incurred again
Speculation:
-42% of the cost of the pilot plant should be eligible for a refundable tax credit, meaning they may get a tax refund of $1m before the end of September. This might tide them over for a little bit longer to avoid a capital raising. I doubt it would last long enough to get the feasibility study out and conducting a capital raising on the back of that.
-The possibility of changing locations is interesting. It is stated that this will offer lower capex and opex, but we don’t know if that is because there have been unexpected costs in Sudbury, or if the new place is outright a lower cost option (in which case, why wasn’t it identified to begin with?). It is also curious that the discussions they are having are sensitive and prevent disclosing the location. I can’t understand why agreements regarding the supply of consumables and by-products would require confidentiality of the location. Unless of course the location would reveal the identity of the counterparties….
-I am wondering if the team will do a large CR prior to completion of the feasibility study. Something around $15m etc, which would ensure they made it to the end of the FS and give a big chunk for the capital cost of P1. Otherwise they might be doing two in a relatively short period of time, which wouldn’t be a great look, nor cost effective
(20min delay)