I certainly did have some but was waiting for D&D to upload...

I certainly did have some but was waiting for D&D to upload Tony's preso on YT so that I could re-watch it (3 times for now) just to make sure I picked up the little details while cross-checking it against the latest ann as well as against my forecast modelling and past post; particularlyPost #: 65809578

1. On the DSO, refer link to my previous post above; at that time Tony was reckoning we might have between 850 Kt & 1,200 Kt of DSO material depending on grade at a higher price but it turns out we will only have between 250 Kt & 300 Kt of >1% (slightly disappointed but was it because they will process some of the DSO into 6% concentrate as mentioned by Tony at D&D?) and probably fetch a lower price but don't quote me on this (we don't know what the price will be at the end of this calendar year).

Say if we're to receive just $100m proceed (per Bell Direct's Forecast dated 3 Aug 2023) from the DSO sale; In my line of work; we would treat it as an offset against capex for accounting purposes. The cost associated with DSO sales will be ore crushing and screening, road transport, port & sea freight cost.

2. Per my point above; that means there will be a shortfall; the funding shortfall I've worked out (also refer to the same post linked above) back in Jan 23 was just under $400m (see red bar below); less the $100m potential DSO revenue = approx $300M shortfall including working capital buffer which might just be a coincidence to the indicative non-binding funding update provided by LTR.

For reference, Bell Potter estimated $166m shortfall for the capex after DSO revenue in their Aug 2023 report.




And to point 4 in my previous post; I did not consider a capital raise in my forecast model for the reason above but even if they do say at $2.70 for $300m = 111.11m units; the dilution to current shareholders is less than 5%.

There will be no update to my forecast model for now; as Tony did mentioned near the end of the D&D preso that they will provide an update on the Opex and such once the underground contract is awarded so I rather just wait until there is reliable number to work with; I have a hunch there might be an uplift in opex cost as I understood from Develop's quarterly - one reason stated was the significant expansion in the scope of the underground mining work.




3. Probably the largest one that will affect my forecast modelling is the announced partnership with Sumitomo, my forecast model as I've mentioned a number of times was based on the Downstream SS which is unlikely to materialise; which I think is the nail in the coffin for the downstream PFS at least on a 100% ownership basis. The study will take at least 2 years but I think they're waiting to see how the market and technology will evolve before deciding which products they want to produce ultimately.

LTR did provide an illustration how the partnership will look like on Pg 16 of the D&D preso. the partnership/JV with be at the Intermediate refining (sulphate) which will be located in Australia similar to PLS/Calix and the finishing lithium production (hydroxide) will be in Japan similar to PLS/POSCO or AKE/Toyota.





I am liking this excerpt from the AFR:


which if i'm not mistaken means the LHM plant might cost just 50% to 60% less to built in Japan; + the benefit of the technical know-how of building it and running it.

And if the partnership does materialise; I think this is what the JV will look like:




For capex guidance on the intermediate refining; PLS/Calix had a $104.9 m price tag for the demo plant processing 27Kt into 3Kt; if we extrapolate this to 150Kt (which is free from any offtake for now from year 5 after Tesla's offtake expires) to produce 16.67Kt - we may be looking at least $600m for a similar plant.