My biggest concern with respect to AJM over and above the...

My biggest concern with respect to AJM over and above the obvious need to position more favorable terms with respect to ' Cost ' of debt is additional need for further partnering in so far as it's ' perpetual ' nameplate production going moving forward.

And in my opinion this at the same time a great ' problem ' to have. To explain further I would recap the obvious points we know as taken directly from AJM's 2019 Annual Report to it's Shareholders.

So we know that :

• Commercial production declared March 2019.

And we also know that :-

" The plant is ramping up steadily towardsnameplate production rates as we fine tune variousaspects of the operation to lift throughputs andincrease lithium recoveries. Production reacheda record 45,484 wet metric tonnes (wmt) ofspodumene concentrate in the September quarter,and we are confident of achieving the nameplateannual production rate of 220,000 wmt before theend of the current financial year "

So it makes sense that ' Feed-Stock ' has to be produced ahead of Sales , and that it is this very fact of optimizing your ' Marginal ' cost of production in order to achieve the maximum cost recoveries obtainable from the operations. With these benefits of ' Lower ' costs and obvious high quality being realized from Stockpiles when sales are made.

This can be confirmed by their accompanying comments as follows:-

" Mining has been under way at Pilgangoora formore than two years and the pit is well developed.The high-grade pegmatite zones are beingaccessed, ore stockpiles have been establishedenabling consistent, high quality ore to be fed toour state-of-the-art process plant. "

And ,

" For Altura, as an establishedproducer, we see that as a positive re-adjustmentin the market. We remain focused on driving downour production costs to ensure that we generatesustainable operating margins even when pricesare under pressure "

So if we take into consideration and discount the first 62 million tonnes shipped prior to April 2019 ( as shown in their attached chart ) , and make the assumption that ALL 220,000 tonnes of ' Locked in ' nameplate begins NOW - ie from January 2020. We begin to get a picture whereby Production is clearly running ahead of Sales by a factor of at least 2 to 1. This is because the Nameplate of 220,000 is actually spread against the forward agreed terms of some 54 Months to June 2024 and represent only circa 8 million tonnes per month if we assume a straight line based analysis. ( as calculated from below table. )

So if we overlay on top of that their statement in regards historical growth rates , and assume the ' Status Quo ' will continue in this regards , we can easily ascertain the need for a substantial increase with it's existing partners or indeed a ' NEW ' large partner who requires much more Spod beyond the next 12 months.

" Long term lithium market fundamentals remainvery sound. According to forecaster Roskill,demand for lithium has increased 13% per yearsince 2015, driven by the use of lithium-ion batterytechnologies in automotive, portable electronicand energy storage applications. "

My conclusion would then be that this particular financial ' Transaction ' they speak of may in fact relate to an agreed further Investment in AJM by an existing Partner , or indeed even a Director's stake being offered at a much higher rate to a potential 'New ' Offtake Partner. Of course this stake is somehow ' streamed ' against production for Stage 2 will remain to be seen. Whatever the case, I think it fair to say that a portion of the transaction will be used to pay down the existing debt.

There is also the off Chance of course that the transaction is associated with the sale of AJM's Tabalong Coal Assets. Interesting and equally exciting times ahead. Best of success to ALL holders it resumes trade.......