Now you are touching on one of my reasons why I didn't want the PFS released so soon, selfishly, and in my view not ready... released what appears to be simply to meet a promise. Screw the promise in my view, better for numbers to stand up to scrutiny released late than numbers that are released early but full of holes.
So for
@Damien43, each to their own - I'm not going to comment on your calculation and let others here do their part.
A reminder, the most important figures in any feasibility study, which are due diligence by itself in nature, are NPV and IRR. The rest, opex/capex - breakdown of details are secondary. Investors often than not would gloss over AZL's recently released PFS just because NPV and IRR are simply not attractive enough, would not care to look at the details, opex capex and the lot.
That said I'm off the view that Prairie project remains on the right path. Modular is a key winning differentiation and Saskatchewan is hard to beat (no one can choose the "where" in the economic equation of mining so it's a great moat as the rest can be revised especially with modular). And based on our own economic study, given a change in delivery approach (to one that we've envisioned for Prairie Lithium project as opposed to what the company is currently reporting) that would show tangible reduction in cost, we should therefore see tangible improvements on the IRR before the next funding round.
For a wider audience...
That said, no one can ever perfect a feasibility study and most very serious investors do our own, and just merely compare it to what the company releases... usually post PFS, but with Prairie we did our own and waited for PFS. Our own economic study suggest a very profitable project that can reach production quickly... but now having seen the PFS, I have to say, the company has a lot of work to do.
Why is delivering things quickly is very important, despite objectively the plan is not yet "good" and knowingly have many rooms for improvement? Because delivering a project can be done in many ways... there are many methodologies and framework: PMBOK, Waterfall, Prince2, Agile, Prince 2 Agile, etc etc...
So in our economic study on DLE, one that is not yet fully proven at commercial scale, we look for cost reduction and efficiencies. The DevOps approach, popularised by tech companies, is one such thing. Google will probably tell you it's a software thing but really it applies to all types of projects including construction and mining. Ultimately it means get product to market as quickly as humanly possible and as low a cost as able no matter the inefficiencies and problems. Risks and issues (problems) can be improved over time, addressed incrementally, with added benefit of "help" from stakeholders and end consumers (whether you use the word criticism or suggestions) feedback loop to continually improve cost and development over time.
AZL's approach to Prairie project is, for lack of a better term "DevOps", as opposed to, for example, VUL's "big bang" approach with massive capex required up front. Hence why AZL's capex is not reporting billion dollars compared to, say, VUL. Profitability takes a back seat as the primary goal is to earn revenue as quickly as possible.
So all said and done, it's a project worth investing for us with risk/reward measured differently to say, VUL.
No doubt E3 Lithium is watching closely as they too need to decide how they are going to "skin the cat". Their PFS due for release this quarter (Q1 2024).
Best wishes. Cheers
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