Strip ratio is high on the list of importance. Do we have any...

First 71 Last

Share
Profile

Follow
Wallstreetyips1

619 Posts.

482

26/09/23

21:06

Post #: 70040033
Share

Originally posted by dawgfather: ↑

Rather than give you my specific thoughts, here are metrics from 3 comparable projects:

GL1 (Manna - Western Australia), AKE James Bay (Quebec Canada) and SGML (Sigma) Grota Do Criilo (Minas Gerais Brazil)

A few comments on these 3 studies. The GL1 study was perceived very negatively by the market. They've got a $435m capex estimate while their market cap is currently only $366m i.e. they would need to issue 118% of their current SOI just to fund their capex bill (clearly not feasible). Awful strip ratio (22:1) and they've gone with a very bullish (compared to other company scoping studies) $2,500/T long term lithium price).

The AKE study was completed in 2021 and they updated their costs this week (showing significant increases in opex and capex due to inflation - these numbers are included below). However, being in Canada, they still have a lot of permitting still to go (even though they've been trying to get approval for many years already). On the positive side, their strip ratio is phenomenal (3.6:1) i.e. their pegs are very flat laying and close to surface.

I'm not financial guru, but my understanding is that the AKE NPV appears relatively small ($1.7bn due to the study considering a 19 year LOM which discounts the cash flows significantly in those later years of the project). This goes to show that the headline NPV can not be considered in isolation and needs to be analysed in the full context of all the other aspects of the project. The market also won't react to a big NPV number necessarily (GL1 is capped at $366m despite the $2.8bn NPV).

Sigma, nothing much to add as their project is already fairly well known on this forum. Ridiculously low capex and opex numbers considering the size of the operation, however what's interesting is their fairly mediocre recovery rates - so it will be interesting to see what recovery rates are used in our study.

NPV: GL1 - $2.8bn (pre-tax as the company did not provide a post tax number), AKE - $1.7bn post tax, SGML - $15.28bn post tax)

Output: GL1 - 221ktpa, AKE - 311ktpa, SGML - 766ktpa

LOM: GL1 - 10 years, AKE - 19 years, SGML - 13 years

Strip Ratio: GL1 - 22:1, AKE - 3.6:1, SGML - Ranging from 12.5:1 to 16.4:1

Recoveries: GL1 - 70%, AKE, 70%, SGML - Ranging from 50.6% to 65%

Long term lithium price used: GL1 - $2,500/T, AKE - $1,001/T, SGML, $1,500/T

OPEX estimate: GL1 - $688/T, AKE, $407/T, SGML - $401/T

CAPEX estimate: GL1 - $435m, AKE - $381.5m, SGML - $291.3m

Payback period: GL1 - 15 months, AKE - 1.4 years, SGML - 1 month

Expand

Strip ratio is high on the list of importance. Do we have any indication of what ours might be?

LRS Price at posting: 26.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

Reply

There are more pages in this discussion • 31 more messages in this thread...

First 71 Last

Add LRS (ASX) to my watchlist

(20min delay)
Last 23.5¢		Change 0.000(0.00%)		Mkt cap ! $658.8M

Open	High	Low	Value	Volume
24.0¢	24.0¢	22.5¢	$1.918M	8.262M

Buyers (Bids)

No.	Vol.	Price($)
2	70000	23.0¢

Sellers (Offers)

Price($)	Vol.	No.
23.5¢	258496	10

View Market Depth

No.	Vol.	Price($)
2	70000	0.230
9	396609	0.225
9	341021	0.220
6	238950	0.215
10	493204	0.210

Price($)	Vol.	No.
0.235	258496	10
0.240	1374513	19
0.245	1323073	6
0.250	884601	23
0.255	282753	6

Last trade - 16.10pm 06/05/2024 (20 minute delay)


Last 23.3¢		Change 0.000 ( 2.19 %)
Open	High	Low	Volume
23.5¢	23.8¢	22.5¢	2258784
Last updated 15.59pm 06/05/2024 ?

LRS (ASX) Chart

Strip ratio is high on the list of importance. Do we have any...

Featured News

Mantle Minerals to kick off drilling at Mt Berghaus in WA

Sold out signs go up for RIU Resources Roundup in Sydney

Westpac tracks lower in profits in first half of 2024, with a 16% yoy drop amid slowing economy

Maiden drilling at West Arunta hints at major IOCG system for Rincon

Tamboran is listing on the NYSE, and Wall Street is paying attention

Buyers (Bids)

Sellers (Offers)

Featured News

Strip ratio is high on the list of importance. Do we have any...

Featured News

Top Stories

Mantle Minerals to kick off drilling at Mt Berghaus in WA

Sold out signs go up for RIU Resources Roundup in Sydney

Westpac tracks lower in profits in first half of 2024, with a 16% yoy drop amid slowing economy

Maiden drilling at West Arunta hints at major IOCG system for Rincon

Tamboran is listing on the NYSE, and Wall Street is paying attention

Buyers (Bids)

Sellers (Offers)

Featured News