If there is such a thing as standard model in mining, the standard mining model is to dig ore out of the ground and put it through some sort of concentration/beneficiation process to improve the grade to a commercial product with less transportation costs. If the grade is particularly high (iron ore), concentration may not be required. Under this model, setting up the mine costs money. Building the concentration plant costs money. Its your typical capital project - invest monies now for future returns.
Talk of monetizing the gold is simply IMO saying that they are not intending to go down the route outlined above. Somewhere along the value chain they intend to involve third parties so that a significant capital cost is avoided and return on invested capital is improved. They haven't done the deal so its likely a number of options remain under consideration. The presumed inability to provide separate tenement title to the gold limits the outright sale of tenement containing a JORC resource of (in the future) 1m oz of gold option.
If Delta can do the deal, pre-selling the right to receive X Mt of ore with a grade of at least y g/t would be one option. The buying company would want some protection against future possible lower gold prices so the deal may involve Delta receiving delivery top-up payments if the price of gold is above say US$2,000/t. The gold company committing to receive the ore and pay more if the gold price is above US$2,000/t and they are effectively paying mining costs up-front.
Delta would be getting a chunk of cash upfront (they have monetized the gold) that is then applied to mining lithium & gold and any associated processing plant that Dela would own and of course delivering on the gold ore supply commitments made.
DLI Price at posting:
21.5¢ Sentiment: Buy Disclosure: Held
(20min delay)