Your comparative calculation for LTR/AKE is exactly right.
AUD8.80/share and, add $1.20 for premium valuation due to superior tier 1 deposit….that’s LTR $10/share. I agree 100%.
That is minimum though. LTR has a lots of advantages over AKE.
Yes AKE hasn't got a Tier-1 resource.
In lithium business we need to understand the basics well; A brine lithium resource is a secondary lithium resource while a hard rock resource is a primary lithium resource.
That means brine resource is inferior to hard rock resource.
Because lithium together with all sorts of other minerals in brine are being carried to the salt lake by the underground waters which go through the pegmatites (hard rock) from the higher grounds (mountains)
NOT ALL BRINE RESOURCES ARE EQUAL TOO NEEDS BY PRODUCTS, ESPECIALLY POTASH IN BRINE. First of all this should be understood well that when you try to extract lithium from a brine lake, you can't just extract lithium and make money because it's not worth it just to extract lithium (unless lithium price is very very high, then you can extract lithium from seawater too).
That means you have to have other valuable by-produts in the brine like potash to make the operation economical.
(That's the reason Atacama is a low cost project in comparison to all other salt lake projects).
The producers pump that brine water into the pumps, keep their for 12 to 18 months, water evaporates and different types of salt remains in the ponds. They are chloride type of salts.
Lithium chloride
Potassium chloride (KCl - Potash - MOP)
There might be potassium sulphide (SOP) too in some lakes (that is a product even dearer than potash)
Magnesium Chloride
Sodium chloride (salt for out tables)
etc.
Then they all have to be separated through a process. Lithium chloride is being converted to lithium carbonate on the site. Potash and table salt s being sold easily. The most expensive part of process is separating the magnesium salt.
BRINE RESIRCES OTHER THAN ATACAMA PROJECTS ARE ALL HIGH COST PROJECTS
AKE's resource is a brine resource and it's a high cost project because its lithium content in terms of mg/l (miligram per liter) (grade term for brine) is too low in comparison to Atacama projects of ALB and SQM.
See the table below for salt lakes in Sth America. (It's an old table but gives a good idea.
See Atacama lithium grade is more than 2.5 times better than Olaroz salt lake where AKE project is at.
On top of that the potash grade in Atacama is 4 times better than Olaroz. Magnesium grade is 7 times higher and its hard to remove, not a good thing btw.
Before producing lithium Atacama was producing potash, table salt and some other products for long time too. It was already an economically viable project.
While Olaroz is low in lithium and potash, Cauchari salt lake is even lower (there are many other ASX lithium projects there too).
(I'm using "grade" term for brine for you to understand easier but it's not the correct term for brine)
IF RAINFALL HAPPENS THEN PONDS ARE GONE..! WAIT FOR ANOTHER 12-18 MONTHS
Also brine lake project are always in big danger of dilution by rainwater.
Normally there is very little rainfall at those high altitude (2000-to-300mt) salt lake areas. For example it rains once in 8 years at Atacama. But when it rains the rainwater dilutes all of those ponds and fill it with water, then they have to wait for another 12 months for evaporation if the salts in ponds are not damaged.
That is a big risk for any of these projects. Therefore I'd never think to ut all my money in any of those projects as I have done for LTR.
SOVERIGN RISK
Sovereign risk is another problem indeed. We now know better after Chili gov's latest action what can happen in any of those countries.
ALL QUEBEC-ONTARIO (CANADA) PROJECTS ARE VERY HIGH COSTS PROJECT BECAUSE IT'S A FROZEN COUNTRY NEARLY HALF OF THE YEAR. SO IS THE JAMES BAY PROJECT OF AKE (Sayona's projects are there too) AKE's hard rock project James Bay is in Quebec. They even couldn't start it for a long time. It's also very high cost project.
If you are investing in a projects at the middle of frozen country (Quebec Canada) which everything is frozen 5-6 months of the year, then you need think about how to get the humans and machines would work there. (There are many projects out there now, including AKE's James Bay hard rock project).
You need to build building on top of the whole process plant and build big domes on top of open pit grounds to protect the operations going on there. Otherwise everything gets frozen.
If anyone wants to know about the problems of exploration and development progress in the Quebec/Canada and the Northern Ontario regions they can read the news below.
FMG and BHP are at bidding war for Noront Resources with high-quality nickel, chromite and copper. The area is close to Quebec and at the same parallel. It is said on the article;
"That’s the good news (resource is good).The bad news is that the area is remote and currently devoid of the infrastructure needed to begin development...Indeed, Noront has a chequered history of ownership - having seen off several major investors, including US heavyweight Cliff Resources, that have been financially burned after the stranded assets proved too expensive to develop as commodity prices moved around..."
That is the problem in Quebec. That's the reason AKE (ex-GXY) hasn't start development for a long time and Nemasca was bankrupted (and sold to Livent) because of the same reason.Do you want to see what SYA (Sayona) is doing there at the frozen country? Arctic exploration
Moblan-drilling (april 2022)
Process plant completely covered. (This is summer time indeed)
Even the crushers inside the building
Grinding (ball) mills inside the building.'
LTR Price at posting:
$2.74 Sentiment: Hold Disclosure: Held
(20min delay)
