With CATL, PLS survives where A40 could not and maybe AJM can not, even though AJM looks to have their process engineering oscillating just fine enough and they are not reducing production so PLS saying less order from customer NOT entire truth?
The point for small retail shareholders is can PLS meet the June 2020 cost base target? Otherwise the risk is cashflow issues will continue even if bank balance ok.
Chinese can also refuse to pay IF off-spec enough. Maybe they already have refused? So this Capital Raise looks like a massive ‘life buoy’ to when higher marketprices for China domestic industrial grade spot price linked lithium carbonate may emerge.
Chinese converters can handle PLS SC6 but at what cost? There would likely be objection to SCconsistency issues And this view is justified by the plant ‘upgrades’. All these upgrades have yet to demonstrate reduction of cost base.
The Problem starts with the resource in ground : thin veins provide inconsistent feedstock and this impacts ‘final’ product. Why “-‘final’-“? Because further conversion is implemented at converter side; And this costs money for example to remove iron oxide which is for PLS a major issue.
At the converter side a slow and expensive process of using a low and strong magnet fed along conveyor belts thinly is implemented.
Simple folk point out, “oh, but customers are lining up”...but what for and at what price? Or should I say at what price to PLS? because Mt Marion did not link to China domestic price for industrial grade and despite their huge cost base. CATL and Ganfeng looks very happy with PLS the slave on a ten year contract losing up to 15-25% every $/tonne. Slaving to survive. And why?
In my opinion it’s the resource mineralogy Ganfeng and GL wagered as high cost base to convert compared to Greenbushes and the plant design having recovery issues suggests so. Note AJM is doing better than PLS engineers yet resource quality not as good on JORC table.
And PLS has not been sincere on the ASX platform, choosing to omit any reference to iron staining in its SC. Whereas to the WA gov it notes iron staining as well as introduced iron. Iron staining from Fe locked in the lattice of spodumene crystal is hard to remove, so my conclusion onnthis synopsis is that recovery rates will reduce with further ‘plant optimisation’. See image of mention of iron staining in screen shot. PLS never mentions this iron staining artefact on ASX announcements. PLS in my view clearly dishonest.
Why would PLS omit reference to iron staining in ASX announcements?
Why no tech grade offtakes as expected based on tone of language PLS adopted?
The pattern is iron is an issue for Pilbara, the evidence is there by conspicuous absence, 1. No mention of iron species trapped in spod lattice and hence iron staining, 2. Only mention of primary purpose of LIMS is removal of introduced iron —but PLS already has LIMS and WHImS installed and introduced iron easy to remove it is widely said, so why the extra LIMS. You have to read between the lines, there is another reason, the “iron staining” in exported SC indicates why.
I can’t see how PLS can not be seen as dishonest in ASX disclosure.
The CR with CATL will reassure the market sentiment but throwing money at optimisation as improving cost base is still the beast of burden here.
I also note ‘what a flog’ the tech grade offtake negotiations as happening was/is, as it has failed to materialise, and no wonder when you look at Greenbushes trial and error to get it right with a far superior homogenous resource. Greenbushes production also shows up that the PLS statistical sampling for iron in the zonations is/was dubious considering the Greenbushes methodology albeit for tech grade, it shows that PLS has not been transparent: why? Where’s the mathematical formula based on iron species to be found on any ASX announcements for PLS? Many here would recall the immense hullabaloos PLS made to demonstrate their Darwinian ‘fitness’ as a low iron high grade resource. Talisons must be amused.
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