Two step instead of 3 step for same recovery equals cheaper capex and opex, both good. Start on 2Mt/a and 4Mt/a year later operating. Nothing in the 2+2 is really a surprise, KB told RDL and myself this a couple of months ago.
Current LCE price about $US20,000/t, so despite the great increase in demand, let's just use that number.
First BOA is profit sharing, MIN don't believe the number so it must be high, WAG at 40% of LCE price.
First 2Mt/a likely high graded, but let's just use the 1.22% grade, = 313,000t of 6% spodumene, = 18,708t of Li2O = 46,406t of Li2CO3 at $US20,000/t
Using 100% = $US928,130,912. X .4 for 40% = $US371,252,365.
At 75c/$US = $A495,003,153 revenue from 2Mt/a plant. Less costs of conservative $250/t of concentrate = 313,000 X $250 = $78,250,000.
Cashflow Y1 =$495,003,912 - $78,250,000 = $416,753,153.
That is plenty of cash to payoff any borrowings and interest and expansion plans, no questions, during Y1.
Y2 with conversion plant and spodumene sales, from 626,000t of concentrate
= 140,000 50/50 share in profits from 20,000t/a plant @ $US20,000/t = $US400m = $US200,000,000 plus 40% of other sales of 486,000t of spodumene concentrate.
486,000t/16.666 to get tonnes of Li2O = 29,160t X 2.47 to get to Li2CO3 = 72,205t X $8,000/t (40% 0f $20,000/t) = $US576,201,600
Total revenue = $US776,201,600 change to $A at 75c = $1,034,935,466 less opex at $250/t = 626,000 X $250 = 156,500,000 = cashflow of $A878,435,466
So Y2 = $878m using today's prices, and 4Mt/a plant.
No reason plant cannot continue to grow with demand to 6Mt/a then 8Mt/a as demand increases exponentially, over next few years.
How are we only worth 54c/sh and MC of $621M???
Arguments; price might go down. But with all these gigafactories coming online and really only Altura adding to world supplies, price is just as likely to GO UP as well.
so safest to use today's price. This is a conservative value!!!
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