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13.0¢ argosy minerals limited

This is exactly the kind of post that Hot Copper should be...

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11/11/19

16:45

Post #: 41361316

Originally posted by VivaLaVida: ↑
I thought it was about time that we resurrected the Fundamentals thread

For those new to AGY, there is some quality info buried in this thread. And to make it easy for people looking at AGY for the first time, or for those who have been away for a while, I've prepared the below table to summarise where things are at, including links to help make it easy for people to do their own research. (Sorry about the formatting, no matter what I try to do to improve it, the length of the links means that the text in the Details columns is squeezed into a smaller width column!! .... grumble!!)

For those who have noticed the recent SP rise, note that the Global X Lithium EFT started taking a position in AGY in late Oct. Info on this can be found under the "Global Lit ETF Fund Total" thread (link to one of the posts in this thread: https://hotcopper.com.au/posts/41309182/single)

In addition, there is a good post by @Launched which includes a graph of the accumulation https://hotcopper.com.au/posts/41341882/single.

It's also worth noting that AGY's next key de-risking milestones is anticipated to be the approval of Development Permits by the local Argentinian Provincial Authorities. These applications have been in the pipeline for a while now, and it's generally speculated that these could be granted any day now. It's also generally speculated that the Permit Approvals might be quickly followed by news on funding/OT (note AGY already have a HOA in place with Mitsubishi RtM).

The recent SP rise could be a PnD, however, there are some strong indicators and catalysts behind the rising SP. In addition, AGY have been slowly and steadily building the company over the past few years, including:
- Proving their resource and chemical processing solution to produce a high quality Lithium product that is ready to feed into lithium cathode production,
- Nurturing a relationship with Mitsubishi which has culminated in both a Sales Agreement and HOA with Mitsubishi RtM (effectively meaning that following extensive testing of specified samples, AGY's Li2CO3 product has been accepted and endorsed by a Tier 1 Lithium company),

Detail
Source Material
1
As of:
Monday, 11 November 2019

2
Company Overview
AGY is an Australian company based in Perth committed to building a sustainable lithium production company, highly leveraged to growth in the lithium-ion battery sector.
AGY webpage:
http://www.argosyminerals.com.au
3

The flagship project is Rincon (RLP); located in Salta Province of Argentina (within in the South American Lithium Triangle)

4

In addition, in Aug 2019 AGY purchased the Tonopah Lithium Project (TLP) in Nevada, USA.This project lies ~4km from Albemarle’s (ALB) Silver Peak lithium brine operation. (*This project is in its early stages is not discussed further in this company summary.)
27/09/2019: AGY purchases Tonopah:https://www.asx.com.au/asxpdf/20190827/pdf/447w5h4r3tw7nc.pdf
5
Key Personnel
Chair:Alex Molyneux(appointed Aug 2016).Mr Molyneux receives no cash remuneration, instead agreeing to a securities package.
15/08/2016: Chairman appointment:https://www.asx.com.au/asxpdf/20160815/pdf/4399pcs56cq0x7.pdf
6

MD:Jerko Zuvela (appointed Oct 2016).Mr Zuvela first joined AGY as a Director in July 2014.
20/10/2016: MD appointment:https://www.asx.com.au/asxpdf/20161028/pdf/43cfht7ykxns06.pdf
7

Lithium Processing Expertiseablo Alluralde.(JV executed Sept 2016, and Services Agreement executed Oct 2016).
20/10/2016:Alluradle Service Agreement executed:https://www.asx.com.au/asxpdf/20161028/pdf/43cfht7ykxns06.pdf
8
Project Overview
The Rincon Project is a JV with Puna Mining S.A; an Argentinian company established in 2016 to own the Rincon Project.As of 27-02-2018, AGY has a 77.5% interest in Puna Mining S.A. (with further rights to earn up to 90%).
Ann 27-02-2018: Argosy Completes Increase in Rincon JV Ownership to 77.5%

https://www.asx.com.au/asxpdf/20180227/pdf/43rz407vtfszgc.pdf
9

The JV was first announced in July 2016 and later executed in Sept 2016.
JV partners are Mr Pablo Alurralde and Mr Francisco Mendendez.Mr Alurralde is the lithium processing expert managing the project on the ground in Argentina.
ANN 01-07-2016:https://www.asx.com.au/asxpdf/20160701/pdf/4388r0lps5php9.pdf
ANN 20-09-2016:https://www.asx.com.au/asxpdf/20160920/pdf/43b9kqfdp3bp12.pdf
10

AGY’s Rincon project is brine lithium (ie not hard rock lithium) within the Salar del Rincon in Salta Province, Argentina.
Google maps:
Salar del Rincon
11
Fast-track Strategy
AGY have taken a non-traditional path to progress the resource development through to commercial operations.As opposed to seeking significant funding up front to establish and progress the project, instead with minimal funding investment to date,AGY have set about proving their processing solution/capability, including building evaporation ponds to support a first stage 2,000 tpa processing plant and proving their chemical processing expertise (Li2CO3 99.8%, LiOH 56.84%).These two critical factors were well advanced prior to releasing their JORC & PEA.AGY are now in the position to progress with constructing a scalable commercially viable plant, starting with 2,000 tpa (with plans to expand plant up to 15,000 tpa.), including a HOA in place with Mitsubishi MtR.

12
Commercial Off-Take Arrangements
Mitsubishi RtM:In Aug 2019 AGY executed a HOA with Mitsubishi RtM for the supply of 2,000 tpa for an initial 3 year term, with a further 2 year option.The relationship with Mitsubishi has been developed over a considerable period of time, with Mitsubishi first visiting the Rincon project in Nov 2017.After AGY produced their first “BG quality” product in Aug 2018, Mitsubishi undertook extensive sample test works on their specific product requirements, which have culminated in both a Sales Agreement in March 2019 and the HOA in Aug 2019.
23/08/201:AGY executes HOA:https://www.asx.com.au/asxpdf/20190823/pdf/447s8vc7m37ckp.pdf
13

AGY have also undertaken potential customer liaison with other entities, including a Korean conglomerate who requested LiHO samples (refer info below).

14
Li2CO3
AGY produced their first product in June 2018, and confirmed “BG quality” of 99.6% in Aug 2018.AGY then undertook liaison with potential customers, providing product samples to specific customer specifications.
06/08/2018: AGY Confirm 99.6%:https://www.asx.com.au/asxpdf/20180806/pdf/43x30wd7z20hcg.pdf
15

In March 2019, AGY advised that following comprehensive processing and sample test works they had executed a sales agreement with Mitsubishi RtM.As such, AGY’s product has been rigorously tested and endorsed by a Tier 1 International cathode and battery participant.
28/03/2019:AGY Sales Agreement with Mitsubishi RtM:https://www.asx.com.au/asxpdf/20190328/pdf/443vj6xrzqzrzt.pdf
16
LiOH
Apr 2019, following interest from major Korean battery group, AGY produced 56.84% (standard “BG quality” is 56.5%)
04/04/2019:Li Hydroxide Update:https://www.asx.com.au/asxpdf/20190404/pdf/44416l23bjstj5.pdf
17

LiOH processing and test works still continue, with samples being prepared for interested Japanese parties. (refer pg 7 of latest Activities Report).
30/10/2019:Sept Qrtly Report:https://www.asx.com.au/asxpdf/20191030/pdf/44b24q9khl8s7b.pdf
18
Evaporation Ponds
~38ha of ponds (progressively completed since Apr 2017), are in full operation concentrating brine to supply the planned 2,000 tpa plant, and will be ready to immediately feed a commercial scale plant (refer pg 6 of the Sept Qtrly)
30/10/2019:Sept Qrtly Report:https://www.asx.com.au/asxpdf/20191030/pdf/44b24q9khl8s7b.pdf
19

AGY's pond design involves large first stage ponds that are filled with raw lithium rich brine pumped from the production wells. This first stage concentrated brine is then pumped in smaller ponds to be further concentrated over several stages in progressively smaller ponds.

20

Stg 1 ponds (1ha):concentrating since Apr 2017

21

The Stage 2 ponds are ~39 ha in total, and were constructed in three stages throughout 2018, hence have been feeding the Pilot Plant during it’s commissioning and test works, and the Sales Agreement with Mitsubishi RtM.

22

Stg 2.1a ponds (~10ha):Concentrating since Jan 2018
16/01/2018onds Fully Operational:https://www.asx.com.au/asxpdf/20180116/pdf/43qvb0mvb9cbnn.pdf
23

Stg 2.1b ponds (~9ha):Total ~19ha evaporation ponds as of Aug 2018
29/08/2018ond Update:https://www.asx.com.au/asxpdf/20180829/pdf/43xsspsrfm60hr.pdf
24

Stg 2.2 ponds (~19ha):Total of ~38ha evaporation ponds completed as of Dec 2018
10/12/2018: Pond Update:https://www.asx.com.au/asxpdf/20181210/pdf/4412sdhq5sh3vc.pdf
25

Stg 3 pondsesign and cost estimates have been undertaken for ~300ha of ponds; being 21 ponds, in preparation for inclusion in the 10,000 tpa project development applications.(refer pg 5 & 6 of June Qtrly)
June 2019 Qtrly:https://www.asx.com.au/asxpdf/20190730/pdf/446zlm7j7y4h1p.pdf
26
Processing Plants
Pilot Plant:Apr 2018 the Pilot Plant started operating
03/04/2018ilot Plant Start-up:https://www.asx.com.au/asxpdf/20180403/pdf/43swnthqp62lrt.pdf
27

Following several week of commissioning, the pilot plant produced the first batch of LCE in June 2018.
05/06/2018:First Batch of LCE:https://www.asx.com.au/asxpdf/20180605/pdf/43vk7781n9xpqk.pdf
28

This was quickly followed in Aug 2018 with the first batch of BG quality produced.
06/08/2018: AGY Confirm 99.6%:https://www.asx.com.au/asxpdf/20180806/pdf/43x30wd7z20hcg.pdf
29

Scalable Chemical Process Solution:In Sept 2018, AGY confirmed the success of their chemical process solution and advised that the process was scalable.As such, AGY have progressed on a path to undertake an upscaling approach to constructing a commercial processing plant; ie an initial 2,000 tpa commercial plant can be constructed to commence revenue generation, which can then in turn be increased to 10,000 tpa (note the PEA released in late 2018 included an option for up to 15,000 tpa)
13/09/018:Success and Scalable Processing Solution:https://www.asx.com.au/asxpdf/20180913/pdf/43y9d836d917ws.pdf
30

Commercial Scale Plants:Mineral rights are under the jurisdiction of local Argentinean provinces (ie they are not determined at a federal level), as such, permits are granted via the Salta Mining Dept and Judiciary. AGY are well progressed in the permitting process for a 2,000 tpa commercial processing plant, with applications having been submitted earlier in 2019.In addition, AGY are also forging ahead with applications for a 10,000 tpa plant (refer pg 2 of the latest Activities Report).
30/10/2019:Sept Qrtly Report:https://www.asx.com.au/asxpdf/20191030/pdf/44b24q9khl8s7b.pdf
31
Next Key Milestones
It is anticipated that the 2,000 tpa permits approvals are imminent.It is also further speculated that the granting of these permits will be quickly followed by an update on funding arrangements for the commercial scale operations.

32

33
Recent Key ANNS:
Sept 2019 Activities Report
30/10/2019:Sept Qrtly Report:https://www.asx.com.au/asxpdf/20191030/pdf/44b24q9khl8s7b.pdf
34

May 2019 AGM Presentation
29/05/2019:AGM Presentation:https://www.asx.com.au/asxpdf/20190529/pdf/445g440wzcw2pq.pdf
35

Nov 2018 PEA Presentation
30/11/2018EA Presentation:https://www.asx.com.au/asxpdf/20181130/pdf/440v5cq90hdmyl.pdf
36

Nov 2018 PEA
28/11/2018EA:https://www.asx.com.au/asxpdf/20181128/pdf/440q663bmjz5wk.pdf
37

Nov 2018 Upgraded JORC
13/11/2018:Upgraded JORC:https://www.asx.com.au/asxpdf/20181113/pdf/44075h205314lb.pdf
38

Link to ASX ANNS
http://www.argosyminerals.com.au/announcements/2019
39

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This is exactly the kind of post that Hot Copper should be about! I'm sure I'm not alone in saying I very much appreciate your time and effort in this research and your generosity in sharing. Bravo VivaLaVida! GLTAH

AGY Price at posting: 10.0¢ Sentiment: Buy Disclosure: Held

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