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AGY

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3.7¢ argosy minerals limited

Li-related News/Articles/Reports, page-7683

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GCar

14,079 Posts.

8553

06/05/24

00:12

Post #: 73675746
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Originally posted by Rob826 ↑

You're somewhat correct @Poohbear. I ran some calculations and have determined a breakeven production volume of 1,100 tpa, or 55% of nameplate. That volume yields a return of ~US$100k (~A$150k) annually for AGY (see below).

Ramping all the way up to nameplate (2,000 tpa) yields ~US$1.5m (A$2.3m) annually (see below).

I don't think I've been far-fetched or pessimistic in my assessment at all. I've based my analysis on a US$10,000 OPEX rate, consistent with GCar's estimation. If the price of carbonate doesn't improve and AGY is compelled to resort to spot market sales, their anticipated maximum yearly profit would be just ~$A$2.3m, provided they can achieve nameplate production, which I think is doubtful. That's a marginal return by any standard.

Regarding lithium demand, I agree with your observation that it's subject to cyclical fluctuations. However, I remain sceptical that AGY will be profitable before the lithium market rebounds. The data I presented above indicates that even with nameplate capacity sales at current spot prices, AGY would only secure a slim profit margin. As previously mentioned, it's just enough to tread water, and that's why I think we'll see a cap raise in the near term.

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“I've based my analysis on a US$10,000 OPEX rate, consistent with GCar's estimation”

Don’t misrepresent a scenario that I presented as my estimate.
I have modelled dozens of scenarios, developed to allow me to examine various potential outcomes and the impact of various key factors.

Last edited by GCar: 06/05/24

AGY Price at posting: 12.0¢ Sentiment: Buy Disclosure: Held
9 Upvote

1 Great analysis

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