Stars aligning for PLS.
As you pointed out recovery rates are very very solid and if throughput rates are maintained proportionally, at full utilisation the plant should be able to exceed 330k dmt pa.
Balance sheet is very very solid with debt a very very reasonable 5%pa.
The final piece of the puzzle was production costs, and as well telegraphed they are confirmed to be in a very very healthy range.
Now is a bit of a waiting game with excess built spod capacity released into the market as demand catches up with the massive oversupply from Li 2.0. While being absorbed I expect pricing to tick up in a fairly controlled manner.
I am not as optimistic as some about how quickly pricing will improve and filter down to Spodumene producers... I agree with Coach Kenny that it will be in the not too distant future, but IMO not very very soon.
I am also not as bullish as Roskill's team of gymnasts about the trajectory of Spodumene pricing / how high it will peak in future years given built idle capacity and effectively shovel ready expansions & greenfield projects. Keep in mind Wodgina and Greenbushes CGP2 waiting to switch on, and the latter proceeding with their tailings retreatment processing plant expansion.
The Australian industry demonstrated just how quickly a large amount of capacity can be brought online and this should not be dismissed as implausible a second time around. When pricing rises to incentive levels, phrases like Stage 3 will become prevalent again from incumbents.
Individual projects do matter. Not all hardrock projects are guaranteed to be economic and the same goes for brine and sedimentary deposits. This is hardly an industry for broad generalisations.
PLS has a large, low strip ratio, tier 1 resource and the far superior section of the orebody.
Solid vested interests and tacit confirmation from BNP Paribas that the project is operationally sound after a persistent period of significant doubts surrounding plant performance and capabilities.
When Li 3.0 comes around, PLS will be well positioned to take advantage of any price spikes while newcomers likely ramp up as a group and face similar struggles to what those from Li 2.0 have encountered.
Experience will matter.
Importantly there is now clarity demonstrated in real world conditions from PLS that offers a certainty to investors that the many hopefuls - several touting world's lowest costs - cannot provide through feasibility studies that have unfortunately plagued the industry as unreliable.
Slowly but surely is my assessment for a now derisked project.
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