He is PLS production cost $87/USD versus costs of a range of underground mines.
Because it's not just a matter of underground mining cost xyz scale also plays a big part in the costs equation.
A40 is going to be on the high end of the scale I am not going to claim otherwise probably double what PLS are forecasting.
With that cost making up a third of PLS cash costs, you take A40 current costs of $553/t and divide by 3 it's $185/t, so right now we already running above what you would expect costs to be for underground.
Now does $553/t cash costs justify production no it doesn't it's too thin to justify the spend, but it's not as simple as that there is one massive factor people are missing.
Right now our $553/t cash cost production grade is 0.89% Li, the estimated resource guide is between 1.25-.1.4% lithium, factoring for recovery that's up to over 35% more lithium than we currently get per mined ton.
Thats pure additional $265/t of revenue per ton straight onto the bottom line should be no additional costs, as we are already running at underground mine costs on our current 15:1 strip.
Current costs of $553/t would drop to $288/t and when we push to 240ktpa runrate, on this increased grade material that would actually push us out to production of 325ktpa processing the exact same amount of material.
Estimated $440/t cash costs on 240ktpa, which would be 325ktpa would drop to $175/t cash costs.
This announcement was another transformative one for the company, seeing the selling people just aren't there yet as is the case still with the hydroxide, 30% revenue bump....if jiangte had to offer that to jump the que next deal won't be any worse the bar has been set, but we wait till cannacord work out how to use a calculator Reg probably has a migraine trying to work it all out.
Next step is start drilling 200m spaced fences put this resource on paper and it will start to perhaps slowly click.
A40 Price at posting:
20.5¢ Sentiment: Buy Disclosure: Held
