The original ore upgrade plan appeared to be a simple double/triple replicate of the optical ore sorter. The success of the DMS trial showed that this would have been a sub-optimal decision and an upgrade involving DMS plant rather than more optical ore sorters is likely to be the way to go. The DMS kit is however more expensive capex. For example, Core lithium commissioned Primero (a sub of NWH) to build what appears to be a 1.1Mt capacity DMS and that was $40m (per NWH's announcement of 28 Aug 2021).
If E25 were to implement a 3x capacity upgrade and remove the optical ore sorter from the mix then that's the sort of sized capex bill they would have for DMS. There may be different configurations / smaller scale DMS units that are less but its definitely well into the $10's of millions for DMS.
One of the things the DMS experiment did do is confirm the size of the performance gap between where the optical ore sorter was working and where it should have been working if it was expected to deliver results broadly similar to DMS. Having clarified the size of the gap, that may have assisted the experts to figure out remediation solutions.
I wouldn't put too much weight on what's happening with the 37% South African lithium price.
The E25 contract has been stated as linking to the 44% prices with a presumably formula driven discount. The spread between the 37% and 44% prices appears to be somewhat wider now than it was when the contract was inked. The following chart was on Jupiter's website. The 37% grade has been range-bound between $3 and $4 over the last 3 years during which time the 44% price has spent a lot of time above US$5 and some time above US$6. It is currently however a poor price around $4.50.
The premium between 44% and 37% has been a lot wider over the last few years than the typical 50c-$1 shown on past E25 reports. I'm not sure exactly what is contributing to this wider spread, but there's either positive attributes to the ore mix for 44% Manganese or negative attributes to what else is part of the 37% South African grade. Presumably the reason for Butcherbird ore to be priced relative to 44% ore is that across the Manganese and non-manganese elements, its closer to the 44% product.
E25 Price at posting:
56.5¢ Sentiment: None Disclosure: Held
(20min delay)