Hi
@anatol,
That is completely true and in fact, I think we are in a far better position than I had originally anticipated.
Yes, we will indeed have an additional $11.9 million in receivables from the Jaguar shipment and 24,904 dry metric tonnes of saleable concentrate which I calculate would achieve an additional $32.1 million once sold (forms part of the estimated $43.9 million proceeds for the 37,680 WMT shipped in the Phoenix Sky shipment). These two adjustments alone will result in additional $44.0 million cash proceeds of which the majority of costs have already been incurred... it is astonishing.
But that isn't even the best part and I think you know where I am going with this... we have 1.3 million tonnes of clean ore ready to process and make +200,000 DMT of SC5.2 which could sell for something approximating ~$240 million at todays pricing (let alone increased future pricing). As you know... mining costs are significantly the largest costs of production, followed by processing costs. Since we have so much available ore already mined (with those large mining costs
already incurred), it would be only natural to conclude that LTR have set themselves up for a beautifully successful March 2025 and June 2025 quarter which I think will far exceed market expectation especially given the current lithium environment.
Oh and by the way, how much did LTR actually spend in production to achieve all this additional inventory of mined ore, increased spodumene production, and tantalum production? Only $71 million... this figure represents a $27 million increase over September 2024 quarter's production costs and is a very small price to pay for the value we will see later in subsequent quarters when the
already mined ore is processed into spodumene concentrate.
It makes me wonder how much more profitable the December 2024 quarter could have been if LTR had not mined so much extra ore (+27m), revenue received on Jaguar shipment (+$11.9 million) and saleable concentrate sold (+$32.1 million)? Perhaps it would have been the original net profit of $16.7 million plus the above adjustments to get to an adjusted net profit of $87.7 million for its first full quarter of production. I guess these profits will be deferred into subsequent quarters.
I could be totally mistaken here, but I am very curious about why we have so much stockpiled ore which seems to be more than we can currently process? We certainly have a margin of safety to continue production if mining scaled back and could theoretically have enough ore to process for the next two quarters? Perhaps it is a cost control and contingency measure? Maybe the reason why we have such a large stockpile of ore is that shipments to Tesla will begin very soon (if not already with the Phoenix Sky shipment) as commercial production was called with Tesla earlier this month and we plan on making additional spot sales? I would love to hear your thought on this and whether we could increase our nameplate capacity to 4mtpa now that we know we could be pretty profitable going forward?
Below is a summary of our mining and production performance these past two quarters.
| Mining | September 24 Qtr | December 24 Qtr |
|---|
| 1 | Open-pit ore mined (tonnes) | 589,000 | 1,138,000 |
|---|
| 2 | Underground ore mined (tonnes) | 19,000 | 32,000 |
|---|
| 3 | Inventory |
|
|
|---|
| 4 | Stockpiled Ore (tonnes) | 674,000 | 1,295,000 |
|---|
| 5 | Stockpiled Spodumene Concentrate (DMT) | 16,598 | 24,904 |
|---|
| 6 | Production Output |
|
|
|---|
| 7 | Ore Processed (tonnes) | 282,000 | 619,000 |
|---|
| 8 | Spodumene Produced (DMT) | 28,171 | 88,683 |
|---|
| 9 | Tantalum Produced (DMT) | Nil | 246 |
|---|
| 10 | Production Costs | $44 million | $71 million |
|---|
Regards,
CK
(20min delay)