Chinese player swoops in on embattled WA lithium miner, page-56

Who's throwing USD$500m at SDV? Not GXY. The last DFS update had a capital cost estimate of USD$474m, but this included USD$31m for a potash circuit that we now know isn't happening, and USD$43m contingency. Take those away and you're at USD$400m CAPEX. Since then, a simplified flow sheet has identified reduced and staged costs, so expect it to be lower again. Stage one, which gets GXY to production and cash flow positive for the project, is estimated at somewhere between USD$120-160m. Coincidentally, this is probably in the ballpark of what GXY would ultimately need to expend to acquire A40 and get Bald Hill to break even. I know where I'd put my money...

We all know that margins from spodumene are currently terrible, which is why I'm glad that GXY has outlined a plan to move forward with SDV. Most producers are selling spodumene either above, at or just slightly below their cost of production. In the short to medium term, brine producers will do much better.

I agree that Bald Hill spodumene is highly regarded as a top quality product. It may well be better suited for downstream purposes, and I agree that is where GXY should eventually be headed. The problem is the costs are just too high, and A40 will now just cost too much money to get it to a point where it is economical, at least in my opinion anyway. The other issue with your suggestion is that downstream conversion isn't free, so again you're probably talking another USD$50m plus just to get a part share in a Chinese converter.

The synergies are obvious, but the cost benefit certainly isn't.