About eight years ago Paul Lloyd and his then chief geologist Greg Smith walked all over Arizona, New Mexico and much of Nevada looking for the best lithium clay ground to peg. The lithium industry at the time was nascent, in its infancy and not understood by most. Most Americans couldn't spot the difference between Lysterine and lithium. Paul and Greg had the country to themselves. With an XRF portable spectrometer in one hand and a prospector's pick in the other they quickly identified and pegged Big Sandy as the standout deposit. They ignored the dregs leaving these for the latecomers such as Bradda Head. Some have made a decision to buy Bradda Head stock and while I don't give financial advice I think that they'd be better off buying Caroma Industries Ltd. At least there's a financial and emotional interest in Caroma's product line.
I'm not sure how many noticed Paul Lloyd's casual reference during this week's Webinar to the likely scale of Big Sandy. He mentioned that with only 4 per cent of the ground drilled so far the resource could sustain 50 years of production once the whole shebang is drilled and a JORC resourced determined. This isn't the first time he's hinted at the size of Big Sandy but if you quickly do the calculation (20 to 30,000 t/y LCE * 50) you get a range of 1 to 1.5 million tonnes of LCE. Paul is of course being overly cautious here. He has to be, he's an executive director of a publicly listed company. He needs to undershoot. The disclaimers on every ASX release list the necessity to be so. But I don't need to be similarly cautious when calculating the potential size of Big Sandy, I need to be as accurate and close to the mark as possible as this is how investment decisions are best made. My best estimate on Big Sandy is between 1.76 and 4.82 million tonnes of LCE. A monster. My calculations are shown in the table below.
Now while Paul Lloyd needs to be conservative in what he says before the drilling and JORC resource are completed, Greg Smith hasn't felt equally constrained. His estimate of Big Sandy is 4 million tonnes of LCE. That's an inground value of US$200 billion at a conservative $50,000 per tonne LCE. Greg has posted on hot copper in the past under the moniker of
@HollywoodInvest which is probably a reflection of where he is in life at the moment. Anyway, we'll not for sure in 12 months when the drilling is completed. AIMHO.
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