Thanks. The easiest way for people to follow the assays and map them is to use this simple formula at a high level, which is really a simplification of the maths in the estimates presented above (note I just put some inputs in).
Strike length * width * depth * specific gravity (been density of the rock which is around 2.8 - see
http://www.engineeringtoolbox.com/minerals-specific-gravity-d_1644.html to understand specific gravity)
So at say a 14 km strike length, average width of 200 metres and depth of 50 and specific gravity of 2.8 gives you 392 MT of spodumene ore (obviously drilling and a JORC to confirm this hypothetical).
{{{{{{{{Now if you look at PLS, they are essentially saying they will build a 2mtpa plant capable of producing 314,000 tonnes of 6% spodumene at a 77% recovery over a 20 plus year period, from recollection which means you need 6.37 tonnes of ore for each tonne of 6% spod concentrate (or another way to put it (1.25% * 6.37 tonnes * 77% = roughly 6% spod for PLS). And we know PLS was forecasting production over a large period with a large NPV, also because of tantulum credits etc. See
http://www.pilbaraminerals.com.au/why-invest-pilbara-minerals }}}}}}}}}}}}}}
For AVZ, taking the estimate of 392 MT above and working on a 1.5% Li20 content and 80% recovery rate in effect you need 5 tonnes of ore to get to 1 tonne 6% spodumene concentrate (1.5% * 5 tonnes ore * 80% -= 6%) which means you could produce 78.4 million tonnes of 6% spodumene from that ore. Taking a 30 year project life that equates to 2.6 mt of spodumene concentrate per year, much bigger than any of the upcoming hardrock projects, and using say US$500 per tonne 6% concentrate price (which is on the low side given what PLS and GXY are likely to receive in the next few years) that gives annual
nominal revenue of US$1.3 billion per year but to understand nominal profit need estimate of cost (so don't take this seriously).
Obviously large numbers here but all theoretical at the moment which will increase if depth is increased for example, i.e. they double if depth doubles, or reduced if the other variables remain the same but average grade is lower. Anyway you would need to put that into a discounted cash flow model and estimate costs before coming to an NPV, and too late in the night in Perth for me to be bothered doing it (i.e. that then becomes the benefit to the Chinese but for the avoidance of doubt we will be getting much less than that as a takeover price as the Chinese will internalise that benefit and what we can extract from the NPV benefit from the Chinese in a full takeover will be dependent on bargaining strength). These
calcs don't include any estimates around tin recovery for example so that give you an idea of revenue scope so substantial upside there possibly.
Obviously size/grade of the resource needs to be confirmed by a proper JORC process and only time will tell the true value here in terms of spod resource, tin resource, potential extraction costs, timeframes, NPV outcomes etc etc etc etc. Just ramblings and nothing to take seriously but potential is there, but only the drill bit as it translates to JORC and from there to a commercial project will determine true value. All hypothetical right now are my above calcs.
The above written for the sake of writing whilst drinking a VB.
All IMO
