AGO (ASX) AGO technical analysis

Originally posted by Cashmeoutside ↑

I'm all for diversifying revenue streams if the opportunity presents itself.

Lithium is a possibility considering nearology to Pilgangoora and Wodgina, we are very late to party IMO and it is a speciality metal - most mines or proposed projects are just 2mtpa and produce just 300kt or so of concentrate - and the cost of the project is $200m+, substantially more than CD and not something the company could afford to do on its own.

Copper grades i've seen are rubbish to be honest - a couple of metres of 0.5% cu 100m below surface is not a viable mine. Again it is a metal like lithium that is about 1% grading and thus requires substantial processing to upgrade into a concentrate that can be used by the end user (Atlas do not have this processing capability, they mine DSO).

Gold - there's all the hype of the pilbara conglomerate but again ur talking 0.7grams or so per tonne of ore for a decent mine with a large investment in processing infrastructure to extract the metal.

You’ve got to focus on what you know at what you’re good at. In my view, Atlas are bulk commodity miners (millions of tonnes per year not a couple thousand) with simple processing and have a good supply chain and list of iron ore projects in the Pilbara.. they are not metallurgical engineers or geologists, they are miners. The value AGO needs to realise in is the unutilised port capacity – 6mtpa unused, they can’t fill this will a couple of thousand tonnes of lithium concentrate.

The focus should be on doing what you know and doing it better and cheaper than everyone else.. focus maximising the productivity of the assets we have before going out and seeking others.. dropping a couple of $/t will do much more for margin protection than getting into a different commodity. If I wanted to invest in lithium I would go over to PLS et al... diversification is overrated.

Expand

Great answer. Just saw FMG China report and they have dropped COSTS a massive 75% in 6 years! I know they are a massive producer, but maybe AGO can follow suite? Maybe increase production (as I think you are saying) to meet the Port requirements. Regards.