Took me half an hour to read and digest that. Best thing they have released yet even though it needs to be waded through. Clearly they are plugging away at a lot behind the scenes
My take is, within 6 months we upgrade 2,964Pj from 2C to 2P, and what...75% is upgraded? So being conservative say 50% = 1,500Pj 2P resource. They have deep pockets sugar daddy to fund what they want and prime infrastructure location so there should be no problem with a good % upgrade. I'd expect 70-80%
Clearly they will now get all approvals- albeit staggered by the SA govt- through to Operations. So to me the only questions remaining are:
1. Can they assemble? (my understanding is this is just an engineering issue)
2. Can they extract Synthgas (my understanding is this is not debated as being a problem, it is basic chemistry and the greenies are complaining that they will be extracting it)
3. Can they demonstrate ISG gasifiers operated safely and in an environmentally responsible manner? (see above and the $77m dollar question )
4. What quality of Syngas will it be- flow and quality (Impacts the upgrade %)
5. What % will be converted from Contingent Resources to Reserves? (see above)
Assuming a 50% conversion what would 1,500PJ be worth on todays market, = what as an LCK share price? My serviette math says $3.00 ish
I think Risks 1 & 2 are not a real factor anymore. Risk #3 remains, and even though they are telling us best location and practice, safeguards, it remains. So if Rik #3 is a problem the market is probably wondering what is LCK then worth, and that I don't know?
Share price might lift slowly and quietly and then we get a Disallowed almost overnight with this - the market may decide to sit and watch until the bread comes out of the oven. For off-take, with current East Coast gas shortage and crisis I don't expect companies will wait for it to come out of the oven before engaging with LCK on supply. If they wait too long they won't get any, that is if LCK will supply to them at all. I'd have people in the caravan park and pub watching this closely. 8% of Australia's gas reserve does my head in
THEIR OWN POWER PLANT
As does reading they are already moving to building their OWN power plant there. Can you imagine how many directors of companies up there desperate for energy are crying into their Wheaties thinking "what if we went to Bunnings and bought 5,000 extension cords would that reach..."
So my take is still a few risks to go, but this is now down to weeks, not months, and if/ as they move past 1, 2, & 3 the share price will absolutely rocket
I expect LCKs phone's are going to be ringing hot today. Well done to all involved.
DYOR and GLTAH. Not long now
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