Yep green shoots this week with Hydroxide and Spodumene SC6 up on the latest Fastmarkets price publication - thanks to @HC_Haplo on Twitter for publishing this - I really recommend giving a follow. Note the SC6 trading range peaking over US$5K/tonne, that is great news.
So for LTR, how are we looking?Spod is coming back sharply and be nice to see this above US$5,000 by June and then staying above that. SC6 selling at 10.62% of Hydroxide is also good news.
Direct Shipped Ore (DSO) OpportunityLooking for a moment to our likely first product sale - DSO revenue. I don't often stumble across prices for ore other than 6% grade, but yesterday this popped up, the second line applies to LTR so I thought I'd dive in.
KV Spodumene ore from the Mineral Resources Estimate averages at grading 1.4% Li2O which fits nicely to the above price for Spodumene ore 1.2-1.5%. That product is currently selling at a midpoint of US$320 and trending up along with all Lithia lines.
How much DSO do we have and what could we earn?1m tonnes has been referred to but understandably not confirmed. I guess the cut-off is when we get to the point that the ore is at the right grade for our processing circuit.
So 1M tonnes of 1.4% DSO at Friday's price of US$320/t is US$320M (AU$474M) revenue today less production & logistical costs. Please note that DSO sale is pending Board approval with sales indicated by TO during Q4, 23.
With all Lithium products trending up and expected to continue to rise by a range of industry experts and media this week (Bloomberg, AFR, Joe Lowry et al.) would anyone be surprised with quality LTR DSO selling in October for US$500/t
after costs? Selling 1M tonnes after costs and LTR would net AU$738M during Q4. That is a very nice position to be in.
KV funding shortfallThe 28 Feb 2023 BMO investor presentation says the production funding shortfall is AU$211M and that includes contingency. Even selling DSO at today's price, or reducing the volume to 500K tonnes and the shortfall is covered. At the more likely price (my opinion) of US$500/t and with 1M tonne shipped we'll have the shortfall covered and have paid back the Ford loan before the year is out.
I don't see the lower grade ore price very often, but will watch for it and update in this thread.
Hold 'em tight and note this is not financial advice. These are my hypothetical forecasts based on information available and as I understand it. DYOR.
@TrayonRanger I can no longer see my MI6 and other holdings on my portfolio pie chart. Time for me to apply to join the HAPC please, been in since 0.38c.
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