General Discussion Topics, page-112130

I have read quite a bit of these threads recently. I am a former holder but the big red flag was the most recent $200m raise largely for working capital.

Most people here know the history of NAL. What SYA is trying to achieve with their targets is quite extraordinary. It was previously the most marginal Spodumene Concentrate producer globally and I would suggest holders take a look at the current costs of production in C1 terms that have been announced by other peers. Then apply that to NAL. AKE's Mt Cattlin is a steady state mine that has been operating many years and came in with FOB cash costs of US$830t (down from the previous quarter of US$1033). CXO is in rampup itself however it's reported C1 costs in the most recent quarterly appear to be heavily massaged. That's the beauty of using C1 costs as a headline for many miners.

Personally I would not be surprised if AISC at this point in time are sitting over US$1500dmt FOB. That may mean that SYQ will be subsidising the PLL offtake to the tune of ~US$700t or more. It is within the realm of possibilities that SYQ is paying a typical 10% to the trader / sales agent for product outside the existing OTA.

PLL will be getting 56500t (minimum) this calendar year and to me it is uncertain how much less than this the JV will have available to ship. I do wonder why the apparwntly sudden change of heart regarding signing another OTA. The PLL shipment announcement did not seem optimisitc that they would receive more than the 56500t and noted that sales of remaining product are expected to support the JV's operating expenses.

There are big questions fundamentally speaking regarding performance and costs during rampup. I have said before that I do not expect NAL to reach the nameplate target over a consistent period of time (post rampup). Once in steady state operations I still expect AISC to exceed what PLL pays under the OTA.

It is worth pointing out that SYA has in one announcement shared that it had a single day of 643 tonnes at 5.67% LiO2 and 71% recovery, however for the same month (June) just over 10kt was produced. It would seem that July production was around 11kt. That shows a pattern at this point of rampup that once the plant hit ~10kt in May, increases in production per month have slowed. My expectations for production at NAL for CY 23 are in the range of 90-95kt. NAL is a long way from the nearly 19kt per month required for the nameplate claim.

SYA had an opportunity to provide a clear picture of ramp up performance in the recent quarterly but chose to provide very little information. So as I wrote, while posters on these threads are counting revenue, and without naming names, one in particular has been repeating particularly flawed numbers that attempt to massage the figures in favour of SYA by reducing production costs by 25% - it is quite possible that for H1 FY24 SYQ runs at a loss or around break even while holders on these forums are anticipating 100s of millions in profit.

It must be stated this is the reality of rampup, but also keep in mind the history of the project. While SYQ has no doubt invested to provide substantial increases over previous performance at NAL, I suspect there was only so much they could do given the nature of the deposit they have to work with. They may have short periods where recocery rates are around 70% - a day here, perhaps even a week there, depending on feed - however I anticipate recovery rates to be significantly lower over longer periods. It is very difficult to fathom that NAL has been transformed from it's past to become an industry leader in terms of recovery.

To me the primary reason that SYA has been slammed is because of the very substantial working cap focused CR and the lack of specific details regarding rampup in the quarterly. It has not helped that there has been confusing messaging coming from SYA that did not eventuate.

If NAL were truly on track to meet expectations then there would have been far greater plant performance detail in the quarterly. They would have been shouting it from the rooftop.

The BEOT as posters here like to describe any non retail holder wants more clarity or have connected the dots and formed their own assumptions regarding the performance at NAL and the implications of that for SYA. The lack of information presented to the market regarding NAL plant performance raises serious doubts.

That's my 2 cents. Take it or leave it. I don't much care. I'm not here for likes.