FA & General Banter, page-12751

Scoping Study for Downstream Processing/ Refinery

This is another interesting part of the PFS.

They said on the PFS update anns;
"As part of the PFS, a scoping level study has been initiated to review the integrated downstream processing of the Kathleen Valley product. Lycopodium has evaluated and is determining scoping level operating and capital cost estimates for the production of LHM or LSM at the Kathleen Valley site. The study was carried out in parallel with the PFS (using projected outputs to ensure the plant was appropriately sized)".

D. Richards said on the RSS interview;
"A scoping study is currently being completed on downstream opportunities for the KV project and we’ll be looking to release the results of this scoping study in the next one to two weeks."

It's coming soon.

But the interesting point about it something else.

They are planning to build a refinery at the Kathleen Valley site but not close to a port like Albemarle and Tianqi did close to Perth.

I will tell you why (all in my opinion of course).

The amount of spod concentrate which LTR can produce at KV mine/concentrate from 156mt resource would be 43mt.
But the amount of LCE (Lithium hydroxide) which can be produced from that 43mt spod concentrate would be 5.4mt.

The freight cost of 43mt spod concentrate to the port area would be 8 times dearer than sending LCE material.

When we look at the details of cost break down in the PFS update anns then we will see that the freight cost to the port is the biggest cost in the process.

It's A$65/wmt (wet metric tonne)
while underground mining cost (A$55) is even less than that.




Yes I am aware that transporting Lithium hydroxide and sulfide would need more caution with special handling and storage during freight on truck but it's not a big deal in comparison to the 8 times higher freight cost of shipping spod concentrate. (See my old post about that issue here; Post #:39131611)


You will remember this graphic from my old posts.
It's about vertical integration of spodumene production with chemical conversion (LH or LS) refineries.
And my post about it is here; Post #:40748718 on Oct. 2019.

I was saying at that time;
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LTR is now a prime target by major lithium chemical or battery producer companies or major mining companies.

That's the fact which makes me extremely confident for holding my LTR holding very tight and long whatever the price fluctuations are.

The key point of that fact is that the vertical integration of lithium concentrate producer mines to chemical (lithium hydroxide/carbonate) producer plants (converters) has now been an essential business strategy in upstream lithium supply business.

They now know very well that vertical integration is how they can eliminate the technical problems in processing in both plants (concentrate and chemical) and make good profits by selling lithium chemicals direct to cathode or battery manufacturers. (I explained the details of problems on my first post above under the topic "Integrated production, supply of spod always from same mine in same specs to the chemical plant, is the key").

You can see on the graphic below that all of the major spodumene concentrate producers of the western world (all in WA) are building their own conversion plants in WA.

The major companies are all looking to buy a Tier-1 resource to build an integrated lithium business.

LTR has now the largest Tier-1 deposit in the western world as it has high grade and high tonnage resource with low impurities. It is uncommitted and unencumbered.

Therefore LTR is now a prime target.