Just some quick hypothetical figures- PLL offtake variables, market rates and Nth American BMX style auction
SAYONA QUEBEC REVENUE 2023
WORST CASE SCENARIO USING PLL OFFTAKE 113 AND OFFTAKE FOR REMAINDER AT MARKET CONTRACT PRICE(4862)-
168000 SC6 produced
113K to PLL for 900/t= US$101,700,000
55000 to offtake partner at Chinese market price= 55000 x 4862= US$267,410,000
2023 revenue could be =US$369,110,000....BASE CASE
PROBABLE SCENARIO-50% TO PLL, 50% OFFTAKE MAKET CONTRACT PRICE
168000SC6 produced
84000 to PLL for 900t= US$75,600,000
84000 to offtake partner for US$4862/t= US$408,408,000
2023 probable revenue=US$484,008,000
BEST CASE SCENARIO-50% TO PLL, 50% TO BMX STYLE AUCTION
168000SC6 produced
84000 to PLL for 900t= US$75,600,000
84000 to AUCTION for US$6600/t= US$554,400,000
2023 best case revenue= US$630,000,000
Assuming all timelines are kept and we are producing for the whole year.
Additionally, with the upgraded/supplementary equipment we are adding to the processing circuit, it is highly probable we will
see an increase in SC6 output, as our % recovery rate to ore ratio should increase.
With the new apron feeder, optical sorter, 2 additional sorter screens to control the grind size, the LIMs, additional second WHIMs, upgraded conditioning tank and higher density spodumene concentrate filter, we should be able to avoid all the old bottlenecks they had identified at NAL, and efficiently increase the output of the concentrate, with 6%+ concentration and minimal impurities, particularly Fe.
They have also added a tailings filter plant, to pull any moisture from the tailings to enable dry stacking. This improves environmentals greatly, as it basically eliminates any impact to the water table, and surrounding water courses.
It improves and simplifies environmentals massively, and should facilitate and satisfy the BAPE requirements for the increased throuput to 4200tpd+
This late addition, is what Brett blamed for the late pFS and also impacted and delayed the combined DFS.
So some short term pain for us impatient investors, but could save 6-12 months off the BAPE approval.
Good move....
So,
PLL 50% -BMX AUCTION V MARKET OFFTAKE
US$630,000,000 -US$484,008,000
BMX could generate an additional
= US$146,000,000/year
That's a lot of money per year....certainly worth considering, dont you think??
Conversely, the SC6 price could also come down. That is where the protection of a contracted rate becomes an advantage.
So its probably a call left to an expert lithium analyst forecaster, as to the risk v reward...
But for the next couple of years anyway, while prices are at record highs, auctioning our SC6 could be the way to go....
And then move to a contracted offtake...
Hey BL, what do you think???
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