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Beyond phase II, page-10

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Cassandra

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28/05/16

04:42

Post #: 17890045
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Originally posted by niu ↑

A terrific presentation, wasn't it? Seven pages of content that blows away the rumour mill. Well done to James Calaway and big respect to ORE and the team at SDJ.

"Olaroz production can expand in line with market growth" --- Is this referring to phase 2 expansion or can Olaroz expand further if the market demand is there?
Phase 1 uses just 15% of the current Olaroz resource over 40 years. Whilst there are practical limits to how much will ultimately be recoverable, there is no reason to think they cannot grow beyond phase 2.
1. They have a substantial resource at Cauchari that they are about to drill and should expand - for sure, this will be supplemental feed for "beyond phase 2".
2. They also have a substantial exploration target at depth below the existing Olarox resource.
3. Salinas Grande - currently a little small for a complete stand alone hydroxide/carbonate operation, but several options here including: JV development with other SG explorers; brine trucks to SDJ; pumping to SDJ; exploration to expand the resource

I've invested in ORE purely for its lithium production but am intrigued as to what role borax and potash credits play... Is it just a minor side business or can be they be used to reduce our costs significantly? ...
There has never been an indication of potential value for a Boron recovery circuit. Although it has been mentioned, I would discount this for now.
Potash is another story. The stage 1 DFS indicated a 14.5m USD price tag for a 10ktpa potash recovery (this is a relatively simple harvest from the ponds to begin after the first couple of years of operation - quite stand alone from the main processing plant). That was enough to lower the cash cost of Li2CO3 by 361 USD/t. By the time the deal had been inked with TTC, the potential potash recovery had been upped to 20 ktpa. It is absolutely worth doing - timing has not been discussed for a while but in the mean time it continues to accumulate in the ponds like money in the bank...

Don't worry about the absence of an LiOH comment - the presentation was very focussed for benefit of the market. Their next obvious step for development is phase 2 - repeat a proven process and don't repeat the pain... LiOH may come as stage 3 but in the meantime, the "go it alone" potential of that project should be seen as strengthening ORE's position in its relationship with TTC. I'm not saying it is purely a ploy, just that it has value now even if it is ultimately to be developed further down the track.

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Hi niu,
RPaulson and you spoke about borax credits: I think there are no borax credits from Sales de Jujuy (Olaroz) and, as far as I can see, nobody ever proposed a boron recovery circuit for Olaroz, nor I think such a circuit will be feasible.
On the other hand, ORE fully owns Borax Argentina (Tincalayu, near Hombre Muerto) that is one of the oldest mines in Argentina and it has a demonstrated capacity to be able to operate at low cost and to deliver consistently good products. Borax Argentina was constrained market-wise by its old parent, Borax America (Rio) but now, under ORE, has no constrains whatsoever. I will not be surprised if we witness an expansion of sales into Asia, where there is a large demand for borax.

Cassandra, qui non crediderunt
4 Upvote

0 Great analysis

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