Just want to add to this post.
I did have a read of the TMT DFS and all I will say I did not interpret the discussions between AGIG as binding, nor AGIG committing to funding all the capex cost (or significant part thereof), given the discussion itself in the TMT Ann. Need to be also mindful that say if AGIG are crazy enough to fund the whole capex cost for the gas spur for TMT, the take or pay principle they may work under and how NPV/IRRs work in project valuations I suspect will mean TMT will have quite a large access fee attached to the price of gas they pay for that 'new' route for it to be worthwhile for AGIG, meaning TMT would pay a much much higher cost for its gas than AVL (albeit may save some transport costs because moving V205 from minesite). And that assumes that the Economic Regulation Authority provides them the green light for AGIG to do so which is probably why the discussions haven't concluded IMO to anything binding. My gut feel is also because AVL is no longer looking at 'processing' at minesite that the benefit to anyone of funding a gas pipeline spur, instead of the miner, are also significantly reduced from a 'risk perspective', meaning TMT may find it difficult to get someone else to fund its pipeline in return for pipeline use tariffs.
My actual main issue with this AVL Ann is around timelines and the fact that AVL have changed the goal posts again since the PFS. Infact the PFS back in December 2018 is starting to look as if it is a redundant and costly document IMO IMO.
1. In May 2019, the first change to the PFS was moving from the AMV route to the APV route for producing V205 because they hadn't completed the MET tests prior to the PFS (a different process around reagents needs but APV route also involves more energy need). Refer - Post #:
387912522. This latest Ann, and reason to locate closer to the Dampier to Bunbury Pipeline needs to be read in context to the extra energy needs of the APV route (and impact on opex costs of power).
3. Furthermore this Ann needs to be read in the context of the other input needs, like does the APV route have a higher water requirement or if not why is water now an issue in this Ann when they should have known IMO about the issue back in the PFS stage.
4. The key benefits of this Ann are lower reagent transport costs as i presume they come in at Geraldton port, lower capex need which helps financing, lower gas prices, better access to infrastructure like roads and workforce (saves fly in fly out costs if hire Geraldton workers especially), possibly speedier approvals as per an earlier post of mine on this thread and better access to water.
5. The key costs of the latest Ann are higher transport costs for the vanadium product itself as now moving a greater level of concentrate by road for then more processing for achieving V205 at Geraldton.
6. The other negative is the extent to which this delays the DFS given the change in focus in process since the PFS. I just hope this finalises AVL's sets of changes and they get the DFS done. My main concern lies IMO in management and the continued change in scope - whilst it is good they are looking at the alternatives, my view is they should have got the PFS right, or at least not this far out of wack IMO, in the first place around the process flowsheet.
7. At the end of the day the main driver of viability is going to be the vanadium price as it needs to recover anyway for the project to be a goer (unless of course Major Project Status gives AVL access to very cheap and assessible capex). This probably gives AVL (and TMT) more time to get things right, but until the V205 price improves maybe 2021/22 start date is also ambitous for AVL. But lets hope AVL are ready with a decent DFS in the next few months. Refer - Post #:
38738778 and Post #:
39821623VB downed
All IMO IMO IMO
(20min delay)