Ann: Extension of Voluntary Suspension, page-351

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curiouser27

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15/09/20

07:12

Post #: 47338496
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Originally posted by Sjlasx ↑

Already pointed out "where else" AJM could increase output volume and lower fixed costs on a per unit basis by lifting recovery rates through rectification of plant issues and potential improvements. This has already been flagged by the company.
My previous example was that by achieving a RR of 75% LiO2, AJM could increase output of SC6 by 25% from the H2FY20 average RR of 60%.
I am assuming you meant lowered fixed costs per unit as S2 would increase overall fixed costs.
Plant throughput is within a few percentage points of the DFS nameplate, yet despite processing a higher feed grade than assumed in the DFS (1.00-1.15% LiO2), output is lagging.
So with throughput kissing nameplate (96.3% on the June 20 Qtr) and feed around 1.2% LiO2 (1.20% Q3FY20, 1.19% Q4FY20), one may wonder why they aren't exceeding nameplate output.
One answer was highlighted in the Mar 20 Qtrly report being the performance of the fines circuit which is contributing to a low recovery rate of just 60% for the 2 most recent reported Qtrs.
The DFS assumed a recovery rate of 80%. So, AJM has only been recovering 75% of the DFS expectations. To me, this appears to be a significant amount of wastage ending up in tailings.

For comparison PLS claimed in their FY20 Annual Financial Report that by the end of the period they were largely in line with plant design recovery rates of 72-78% LiO2.
The June 20 Qtrly referred to consideration of the timing of the upgrade along with other "recovery improvement initiatives".
As stated previously, there are cheaper and faster ways to improve performance than simply expanding.
In an ideal world AJM would be able to fund the necessary improvements to the existing plant in the near term and expand through S2.
IMO AJM management are doing all they can to deliver positive results for holders and if they cannot arrange funding for S2 during the current refo attempt, I certainly would not consider it malfeasance, as one contributor claimed would be the case if S2 funds were not raised earlier in the year.

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plant design recovery rates

In simple terms, that metric is useless if its not being supported by sales to offtakers.

Which would in turn be indicated by the plant's full production.

However, if the sales is just to spot market, yep, a miner can jack up that figure any which way they want.

Oh dear, why is that so hard to understand?

G'morn all
Another day at the beach

AJM Price at posting: 7.0¢ Sentiment: Buy Disclosure: Held
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