Hi guys, First time poster, but a long time lurker. I appreciate...

Hi guys,

First time poster, but a long time lurker. I appreciate the time and effort from @Ubique13 generating these numbers, but it seems way high to me. I ran some numbers recently off the scoping study result for spodumene product and I came up with <200m NPV10. Has anybody else got an NPV estimate?

A few notes specific to the numbers:
1. The first year number is quite off for 1 Mtpa plant. The scoping study indicated 190kt instead of 300kt listed there. So shouldn't the initial production be <25kt? Since it is feeding into capex, this will affect the timing and the payback period.

2. When claiming to be conservative, can we really assume resource expansion? The latest resource upgrade put 1.6% Li2O at around 5mt in the grading curve, so I don't see if we could ever get 32Mt@ >1.6 as reserve. I'd probably go for a 25Mt@ 1.4% for a more realistic value (optimistically based on [email protected]% resources), which will become [email protected]% at 80% recovery. I get about 1B NPV10 assuming the capex and the cost numbers are right. If you cut ownership to 80%, it goes down to 800m, but I suspect 500m-600m is probably a better conservative estimate.

I'll be very happy if the prices are sustainable, but let's be a bit more realistic about it. At these prices, new producers are coming online (AJM, PLS, TAW), old ones doubling capacity (Talison), millions of tonnes of new resources (KDR,AVZ,PSC) and those are only Australian companies. As bullish as he is, Michael has also warned on high cost producers. Unfortunately, BGS cost is not exactly on the cheap side due to the approximately 1000km transport distance. Maybe we'll get lucky and a gigafactory opens in Mali...