CXO (ASX) Ann: Wide High Grade Spodumene Intersections at Finniss

Originally posted by Brumbie ↑

What happened last night? Haha.

Buzz I would like to go through your post.

1. "CXO are bullish about Finniss (not just Grants) and they have their geo team along with Como Engineers backing them"

I agree. They keep talking about Finniss as a whole not just Grants. There is something more to this that has not been announced because they cannot yet. Grants is looking high grade but small. So there is hard rock lithium up there and chances are there that there will be both smaller and larger deposits found. Como also advised PLS on their DSO so I am assuming they know what they are doing.

2."Grants is more likely to be closer to 3Mt in size because the 5Mt total is based on maximum dimensions. However, the high grade and hopefully high recovery would improve profitability and perhaps this, along with a bulk carrying ship being 70km away by road, is enough to sign a DSO offtake"

I agree the max Grants can be is around 3Mt. I am going to assume it is only 2Mt as PLS have obviously found that this amount of DSO is very profitable it would not be a stretch to assume the same for Grants.
I think we can join the dots from the port HOA for 1Mt of DSO or 250kt of concentrates.
So what does this mean? Lets assume Grants is only 1Mt. Going by PLS costs of $56t and sell price of $108t of which freight makes up roughly $40t and mining $10t. Is it wrong to assume the Grants costs will be more for mining and less for freight. At worst case lets assume cost differences balance out and Grants is only 1mt. That still provides $50m in net cash flows to CXO for this.
Curiously why have they included 250kt of concentrate? Does this have any substance to it? How would they process this? As far as I know there are no processing facilities in Darwin. Is there a possibility of using LIT's Sileach? Don't know much about this.
I agree its not a company maker but it sure does provide CXO with alot of cash to prove up all its other resources.

3. "DSO not priced in so any announcement would take the market by surprise"
I am thinking this as well. How can it be priced in when we have a EV of $20m.

4. "are CXO willing to simply turn a smaller profit and just get things moving, maybe in anticipation of bigger and better things at Zola and/or Ringwood"
This is exactly what I am thinking. A $50m profit can fund drilling the bejeebers out of Bynoe and Barrow Creek and more. Perhaps we can firm up the Silver, Uranium etc ready for a sale if Lithium goes well. So many options. I believe it would set CXO up very nicely.
Would it be a bad thing if we found half a dozen Grants deposits? I certainly don't think so. Wouldn't that be 6x$50m. This would not be a company maker either. Certainly not what I am here for. I am hoping we find the mother lode at Zola etc and can eventually process.
It will be a very interesting Q2 this year with 4 companies going for it and CXO will potentially be positioned as first mover with heaps of cash in the bank about to come in.

It's all just speculation from me but CXO seem to not allude to things that will not eventuate. So far anyway.

Expand

"Curiously why have they included 250kt of concentrate? Does this have any substance to it? How would they process this? As far as I know there are no processing facilities in Darwin..."

Hey does anyone live in the NT and can cofirm there are no processing facilities??

I cant believe this is true as from what I can quickly Google there is at least a half a dozen iron ore mines in the NT and some aluminium and Zinc etc.

there must be capacity somewhere .......happy to be corrected.....

this article suggests the Frances creek mine and Pine Creek mines are within a stone's throw from Finnis region off Stuart Highway?

http://www.abc.net.au/news/2015-01-27/iron-ore-production-stops-in-the-northern-territory/6043172

also more evidence :

http://www.abc.net.au/news/2016-02-16/six-mines-remaining-nt-mining-industry-downturn/7121396

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Last 14.0¢		Change 0.000(0.00%)		Mkt cap ! $299.1M

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Last updated 15.59pm 03/05/2024 ?

"Curiously why have they included 250kt of concentrate? Does...

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