Running discussion on SP, page-21006

Yawn, I'll give you a tip. You need to explain why the the quantities exported at 79,873 tonne in that copper project is reflective of transport costs faced by spodumene producer proposing to export 1 million plus tonnes in future (starting at 400,000 tonnes btw). Maybe have a go at finding something similar plus proposing to move product through Tanzania. Higher quantities equal economies of scale which means lower transport costs per tonne of product exported. And then you have potential credits for AVZ around tin and tantulum. But, all I will say even in WA you will see that smaller producers face higher transport costs than larger producers (assuming they are near each other). Has always been the case.

Ultimately, what drives lower transport costs for AVZ will be access to rail and barge IMO, and all I will say is for AVZ that appears to be the preferred option, noting some trucking is still required.

The 2mtpa study suggested US$221 per tonne transport cost before credits (Sept 2018) which then went back down to below US$200 per tonne based on how they were going to bag it in November 2018, whilst now the 5mtpa (May 2019) suggests US$223 per tonne, all costs before tin/tantulum credits Even at US$300 per tonne before credits, meaning less than US$250 per tonne after tin/tantulum credits, I still see this as a viable project. But, do an NPV for us proving your points and we can debate from there.

And just for you, since you decided to start a debate - transport costs are just one part of the evaluation pie. The other part are waste to ore ratios and lets start with those Pilbara ones - they have strip ratios of over 4:1 compared to a proposed 0.6:1 here, meaning lower opex costs at minesite per tonne of ore mined by a mile for AVZ. Minesite costs exclude transport btw (see above)

Then lets look at grade - if your Pilbara one say grades 1.25% compared to 1.6% Li20 here, and lets just assume the same recovery rate at 80% and yes I know the Pilbara ones have currently lower recovery rates which is not surprising given higher strip ratios there, then on a 2mtpa ore feed facility, assuming same end price, AVZ would get more revenue per tonne of installed plant capacity. At 1.25% Li20 you need 6 tonnes of ore to get 1 tonne of 6% grade spodumene compared to 4.7 tonnes at 1.6% Li20. So on a 2mtpa plant feed capacity, the former you get 333,333 tonnes of 6% grade spodumene, whilst for AVZ you get 425,532 tonnes, or 28% more revenue per tonne of installed capacity. And if your ore grades less than 1.25% that differential is higher.

So if want to do a proper evaluation need to marry up your opex costs at minesite with revenue generated, and then assess the impact of transport on viability, but needing to take tin/tantulum credits into account at some point.

People on the AVZ threads haven't lived under a rock - whilst at mine site i.) costs will be lower and ii.) revenue generated higher for each tonne of installed capex than say your Pilbara plays (and GXY), and comparable to Greenbushes because whilst Greenbushes is higher grade it has a higher strip ratio, transport costs have always been the key here for AVZ.

Whether there is scope for AVZ to enter the market by 2025 is probably the key issue noting this i.) will be dependent on upgrades to transport infrastructure needed by AVZ under the Belts Program or other programs been completed in a timely manner and ii.) whether the demand/supply imbalance is there for AVZ to enter the market in that time. Obviously, the transport that is around will dictate the level of production that AVZ can enter the market as well.

Yes, I am aware of the risks around transport and I would hope those on the AVZ threads understand the transport risks, as it relates to timing of entry to market, for AVZ.

Anyway, carry on.

All IMO