Interesting post @RPaulson; and good for starting a fair discussion; let me add some point of view in blod (intercaleted in your post):
Todays announcement has left me feeling immensely confident in the company's future, since my initial investment in 2014 this company has had its ups and downs but I feel now it is truely on it's way to join the big 3 as a significant lithium player.
- Current/future operating costs stated (higher than expected but will fall with time)
good intentions but it remains a lot of process troubles to sort out; high level of consumables like CO2, soda ash, steam, etc
- $10,000+/tonne next quarter (even with higher operating costs we have an extremely high profit margin)
only expectations; until now you can see the exports data´s with price of $5.5k and some times $7.5k; avg probably $6.5k so far to $10k in Q3
- Timeline for phase 2 stated (Doubling production at 40% less CAPEX than stage 1)
be cautious with the timeline; it will take more time with the permits and financing; if everything is ok we will see in 2020 the 2nd phase in commercial production. Not before
What are your fair value estimates when taking into account what the company released today ? What would the company look like @ 35,000ktpa? (Once I finish exams I will try to construct a DCF model)
In the announcement I noticed on page 6: "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?
remember one post of Cassandra when she wrote: "the deposit is a clastic endoreic and not a halitic evaporite and remains to be seen from where they will get sufficient brines to sustain nameplate production" so it will be necessary to clarify the real potential of Olaroz salar in terms of brine avilability.
Obviously the company should focus on one thing at a time and ensure that phase 2 expansion goes to plan however as I'm a LT holder I'm intrigued how much the company could potentially produce by say 2020 and onwards.
remeber that everybody is waiting an update about the MOU of Hydroxide; a lot of things open, but the most improtant today is to sort put the ramp up and the Q issues, however not bad to think in the future
From the company presentation in March 2016:
"SALAR DE CAUCHARI:
- Immediately south of Olaroz plant, inferred resource 470Kt LCE, 1.6Mt KCL & 122Kt B
- Potential for incremental production for Olaroz
- Drilling of Cauchari planned for
Q3 2016 with a view to define a larger resource and conduct pumping tests
here a potential conflict with LAC/SQM; remember that in the past ORE was a conflict with LAC in Olaroz border and it was necessary to close an operational hole ($2m wasted for this)
SALIINAS GRANDES
- Li-K project with excellent grades & chemistry
- Inferred Resource 240,000t LCE, 1.0Mt KCL & 12Kt B (2)
- Synergies with Olaroz and potential to produce a concentrated brine product in a JV with a local partner"
(
@niu if you have any comment on the potential of these resources it would be greatly appreciated)
So hard to develop this project due to the aboriginal communities around Salinas Grandes; almost impossible; follow the Dajin evolution with its project here. Also the brine is not the good in the region. A lot of uncertainties.
@niu 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? ... I ask you because you have great technical expertise and I strongly respect your input on this forum. (any comment would be great thanks!)
Credit from potash will be lower than estimated in the DFS (prices down a lot since that) but first it will be necessary an extra investment in the potash plant; no plans about this have been announced.
About Borax I have not a lot of info but it is known here the bad situation of the company (financially speaking) due to the strong reduction in the level of sales, due to 20% or more reduction in the prices and the strong competition of other suppliers in the world. Big combo that will produce losses instead of some profit for ORE.
Anyways sorry for the long post.. I'm just hoping to create a discussion around what the company's options are beyond phase 2 .. could we be potentially a 50,000+ ktpa producer by the end of the decade?
Sorry for my long answers but it is necessary for going to a "fair" discussion.
GLTA .. everything is looking solid!
