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embkb

234 Posts.

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07/09/19

18:32

Post #: 40350527
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Originally posted by Deboss: ↑

Hi @mistie .

From my search queries on ASX announcements, the company’s management compares Buldania’s geological setting to Bald Hill and Mt Marion whereas on the LTR threads here, there’s been a campaign of sorts to compare to Pilbara Minerals.

In any case you’re right to conclude Buldania not meeting grade and I’ll add Buldania would be high cost and we’ve all seen A40’s woes which are hard to fathom as Calderwood said in a video they had the best SC6 in the world.

Moving to KV, the grade does meet at first glance the investment grade of Ganfeng >1.2% and the LCE would have to be >2.1MT, however compared to peers at the same phase of exploration, I could not see any JORC data on deleterious elements by the company via ASX announcements. The MET test was preliminary and small……….. it provides confidence to keep drilling however, the Fe statistic 0.5% is hardly anything to go by for learning the economics of the resource. Case in point and it’s everyone’s favourite, PLS, who show remarkable Fe levels in JORC data (however the statistic was only a sample and so far those low Fe levels look academic and why? (RC drilling method unreliable and the formula for calculating has not been made public unlike Talisons BAD formula).

Because the ‘ore body’ is actually seven spread out zonations, “quasi-homogeneous” as PLS tried to claim, in other words, composed of thin veins many down dipping and very deep for thicker segments……….. The result is something just dawning on analysts and shareholders across the lithium landscape that opex is very high for these inconsistent in mineralogy plays and the resultant impacts on quality of SC not only on the concentrate plant from grinding to flotation but at the converter end where further conversion takes place and not on a ‘mates rates” expense rate for sure.

Stepping back, occluding Greenbushes, SC6 or 5.* producing mines in Australia and overseas are supplying what quality of SC to the market in China? And what’s the general narrative on supply volume?

Somehow not just “oversupply” but also the cost to convert a sizeable quotient of this SC material to SC6 chemical/ battery grade is reflected in prices received.

Granted LTR management are keenly studying the lessons of its more advanced peers………….. perhaps this lesson learning explains why there is a paucity of information on JORC deleterious elements % and, if viable as a commercial resource they will hope to avoid linking to the domestic China spot price for industrial grade lithium carbonate like PLS and AJM are partially crippled by. Because the effect is for example a 20-25% discount to Mt Marion $/t with a 6 month lag.

Further on missing or very hard to find JORC data, the mica levels are not mentioned anywhere in LTR ASX announcements………. the company makes no comment - or + on mica levels except for geological setting and so we know it’s there and since drilling diagrams show thin seams there’s a very strong chance the company will have to face economics decisions on separating undesirables from the spodumene crystals. Certainly not as easy as it sounds. This is a very strange omission. Yet here on these LTR threads we have an assumed representative of the Assay analysis team stating things like LOI can be done on mica hence no mention. I can’t even find a mica reflux classifier image symbol or that stage of removal on the process flow sheet diagram LTR publishes.

Happy to be informed otherwise..............

In any case, what anyone looking into LTR would need to bear in mind, is the paucity of information released by LTR management on deleterious elements for KV, and the, more generic market optic, the inchoate for analysts and the retail market on why all SC6 market producers except Greenbushes is expensive and the quality and consistency sub par, well sub par to Greenbushes long consistently maintained standard that its customers obviously seem very happy with. On the other hand the only way to make customers kind of happy with “tier one” candidates trying to reach Greenbushes SC6 example is to price it in the contracts or on a shipment by shipment basis. Because the defining difference among spodumene deposits is whether they are thick homogeneous spodumene rich pegamtites, or earth marbled with seams of spodumene of non homogeneous mineralogical characteristics.

In other words a moving target for the processing equipment to align with and including the ‘out of sight out of mind’ converter end.

Which brings me to the next point, vertical integration. VI is necessary, beyond a profit point, so that the converters processing equipment has a consistent feedstock from a single source. As I stated above this is not possible or rendered easy but hard and slow work if the ore body is not homogeneous, that is predictable in mineralogical characteristics, so again, expensive for non-Greenbushes resource type producers and hence why I think the market is only just waking up to the fact that lumping all SC6 as battery grade ignores the very distinct differences between a changing mineralogical ore zonation bodies; seams of huge over and under burden (hence no surgical extraction like Greenbushes) and a resource composed of a thick rich in spodumene homogenous in characteristic ore body.

It’s why LTR were originally in Tanzania, a high risk jurisdiction, (acacia mining fine debt) looking for its Greenbushes 2.0. KV is a compromise that might just work. But beware of the hidden costs as ice out lined above. The mining jurisdiction is what makes the risk/reward feasible no doubt.

All IMO & DYOR

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No doubt about it, those 'deleterious elements' just keep on bobbing up everywhere.

Michael.

LTR Price at posting: 8.6¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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