I can imagine some PLS holders won't like what I said but I told before couple of times that PLS is a high cost producer. It is now coming out from its FY results;
Revenue $1.3b - Down 69% YoY
EBIDTA $558MNet profit $256m - Down 89% YoY
Spod sale price US$1176/t - Down 74% YoY
Spod sales volume 707kt - Up 16% YoY
It is also correct that PLS's yearly profit in FY24 heavily influenced by their first half year profits (Q3-2023 and Q42023) when the lithium price was higher.
PLS's ave. sale price for spod was US$1,176/t for their 5.3% grade spod in FY24 but it has been USD$840/t in the first quarter of FY2025 (Q2-2024).
That tells me that they will not be making any profit in the FY2025. Probably they will make a loss at today's Chinese spot price of US$750/t for SC6 because they have to use Chinese spot market price I guess. PLS can't get any better price than US$650/t for its 5.3% grade spod.
PLS will still be making profit on paper on quarterly reports as it will show its cost is US$390/t and sale price US$650/t but there will be no net profit at the FY2025 reports. I think it will be in the red.
I know PLS's Pilgangoora project. Their process plant has an old technology and not very efficient. They have had many problems in the past with a lots of things including water quality which was terrible. They fixed most of the problems however their ore quality is low and blending form different pits.
The problem of PLS is that they don't have a high grade ore. If they had an high grade ore they could have process only that ore and had a very low cost.
That's the advantage of Greenbushes. IGO said on its Greenbushes report that they increased the feed ore grade to 2.2% from mine and their cost is US$225/t (AU$380/t).
Having a high grade ore is a big advantage. LTR also has a very high grade ore (over 2% grade) on the U/G section of the mine.Just like Greenbushes, LTR will be able to process that ore at very low cost for a necessary period of time (until the lithium price recovers) and will be highly profitable.
LTR is now processing the ore which it mined during plant construction. It's above 500kt ore. It's mixed of crushed, cleaned, sorted and unsorted ore. That ore now being processed and sent to the port. It will be shipped to Sinomine I guess. That's not the ore I'm talking about though.
We now have reached to the pure pegmatites in Kathleen Corner. There is high grade ore in that pegmatites. But it's alos not above 2%, maybe above 1.6% which still very good.
More importantly there underground mining decline and tunnels have now reached 5km plus.
The decline directly goes to the VERY HIGH GRADE ZONE of the mine. The ore grade down there is over 2%. If you watched the "Money of Mine" podcast
See the grade map graph below. You will see what I'm talking about. Non of the producers has this opportunity as they all have open pit mines. MIN's Mt Marion and Wodgina both have the same problems. They cn't reach their high grade ores easily.
Greenbushes and LTR have that potential, and GB mine is using that potential for long time (and they will run out of high grade ore around 2031).
Therefore the downrampers and shorters should be aware of this feature of KV project.
I'm sure our management will come up with this plan and LTR will be very profitable.
High grade mines outperform and stay alive when others die.See what was the head of MoM Podcast was saying on his podcast. Just see the minute 30. This guy has a very good mining experience.
“Old vs “New” Commodities – Who Outperforms?
22 Aug 2024
"Your lowest risk option (when the commodity prices are too low) is always just to go straight to the high grade, because the grade always wins"
"...bloody these underground lithium mines like this in Liontown like they are f***king dream of dream ore bodies because there are just freaking the strike length on them is that long".
"I was talking to my mates that are working at Kathleen Valley, they said you just go in and there is just f***king lithium everywhere. It's just freaking goes hundreds of meters."He means "the high grade mines outperforms" and gives LTR's KV project underground mine as an example.
Open your eyes shorters...!
Thats Hilarious.
(20min delay)