Notes from the AGM
TG's unscripted quip that "we are not going to go broke" gained the loudest laughter and applause. Later he referred back to the time that LTR had only 6 employees... not that long before the DFS in 2021. Now there are over 300 direct personnel and over 1,000 people were on site at KV at the peak of construction.
TO's presentation has been put up on YouTube I think so I won't repeat that material other than to say the following... The most striking pronouncement was the slide disclosing the supply demand deficit for the 2024 year and beyond, according to WoodMac. This showed the current lack of influence of raw material providers in price setting/discovery. Tony emphasised that needed to change. The mine and plant are performing as well or better than expected at this stage and Tantalum production outcomes were above budget.
During questions TO responded to a direct reference to the guidance AISC numbers from the optimisation presentation, stating that at current pricing and exchange rate we are anticipating being profitable after the March quarter '25. I assume that coincides with full ramp up completion to steady state.
He paid tribute to the whole management team for their collective efforts to deliver the KV project and to see LTR in production "no longer an explorer...no longer a developer". I think it was TO that referred to the 18 Board meetings for the year (which is a high workload) he said TG often mentioned that the BoD are not there for a suntan. : )
TO also delivered a somewhat surprising remark that the company is now in the process of "lifting the visor" and looking forward to the company's next phase of development. It says a lot about their confidence imo.
Post meeting discussions...
Adam Smits (COO)
Conversation about recoveries and reinforcing TO's meeting answer about recoveries...there are effectively two important stages of the flow sheet prior to flotation where there can be lithium losses.
- "Desliming" has to be undertaken to remove ultra small grind particles prior to entering flotation because that material can negatively impact the float separation of the larger chrystaline lithium. To reduce losses in the desliming phase they are adjusting to increase grind size.
- The ore is described as very clean and therefore contains VERY low iron content. The Magnetic Separation operation is to remove iron, but is virtually not needed as they are currently producing way below spec at 0.7% iron. This is not desirable as whatever iron is being removed in the mag separator results in some lithium remaining attached to it and then going out to tails.
So they are experimenting by "reducing" the efficiency of the mag circuit to take out less iron and improve recoveries while still producing a high spec product. This together with the grind size adjustment are targeting losses in this part of the flow sheet of 15% or less. The target for the float plant is 90% recovery (ie loss of 10%) and therefore net recoveries across the concentrator of 75% or better.
I forgot to ask about the grade, but point being that optimisation in the plant is actively improving recovery every day. Installed additional agitator at a low cost and had an instant improvement in the circuit at low cost.
Plant availability at consistently over 90% was said by Adam to be market leading in Australia.
ROM pad ore close to 1m tonnes and they have run out of room so the pivot to underground seems timely so open pit slow down already happening.
Ford offtake...Ford sought a delay in starting delivery so LTR was able to renegotiate the contract arrangement to have carbonate price as the benchmark and move away from hydroxide for a material improvement in forecast revenues. It was a very good outcome. Ford deliveries to start May '25 I think. He confirmed Tesla is scheduled around December '24. He said he believed the Spod was to be shipped to Tesla's new plant in Austin, Texas. Plant almost complete there.
Grace (sorry Grace, I can't recall your surname)...who is responsible for communications and whom I met last year, produces all the videos and I assume social media comms. Grace is totally committed to her role in the company and creating excitement for us shareholders. She said that sometimes when she has taken a crew to KV for a production assignment, by the time she gets back to Perth for editing etc, the footage has been overtaken by the progress. Lol
Ian Wells (Director) ex Fortescue
Takeover from Hancock is not a focus for the board. The company performs and the takeover looks after itself. Presence of a strong shareholder is actually a valuable source of future optionality to the company. He spoke about their Strategy Day recently and reiterated TO's remark about "lifting the visor". The Board has the challenge to deliver early dividends so what that means for M&A I don't know and I did not press it. But I had the impression that might imply Minres assets that have the capacity to deliver early cash flow are being eyed.
John Latto (CFO)
John could not speak more highly of TO as a leader and the culture being totally conducive to frank talking. Financing outcome in early 2024 was in fact a blessing as all debt is "covenant lite" and cheap. Tremendous BoD workload of 18 meetings for the year. I discussed the NPV number from the 2021 DFS observing that it would be interesting to know a current figure. Interestingly as part of the process of determining ongoing viability for audit purposes, they continue to review the NPV. Suffice to say that the NPV remains robust.
Overall there was plenty of confidence to go around.
Regards
DF
PS Sorry to miss you @yacheng
(20min delay)