Fundamentals

Well I finally got around to knocking up a fundamentals post, A lot of the LTers will know all this already but hopefully it will be of help to anyone new looking at AGY. This is basically all the aspects of the company that make me so bullish on AGY. Starting with Rincon. DYOR and GLTA

PROJECTS

Rincon Project
On 1 July 2016, the Company announced that they had signed a HOA to earn up to 90% interest in an Argentinian Lithium Company – JV between a Mr Pablo Alurralde, Francisco Menendez and AGY. The Company chose PA due to his extensive Lithium expertise and experience (PA is a Chemical Engineer with 15 years as senior management producing LCE and 30 years’ experience designing chemical processes). PA worked on FMCs brine project and has his name on an FMC Patent also. Pablo Alurralde has vast knowledge within the Lithium triangle Salars (he knows a lot about other Cos projects too) and he specifically chose the Rincon Salar for a variety of reasons. What is important here is that PA has exceptional experience, he chose the Salar specifically and most importantly the JV agreement means that he doesn’t get a pay day if he can’t produce. Ask yourself would he invest so much of his time in a JV if he wasn’t confident and couldn’t or hadn’t already made a small lab scale amount of LCE?

The Salar itself lies 3700m above sea level with high evaporation rates and 90% cloud free days per year, rainfall is very low. Lots of infrastructure close by including Electrical and Natural Gas. There is extensive historic works on the Salar by multiple organisations and all reporting average Li values of 400ppm. The Magnesium is higher than usual but Pablo Alluralde is there to address that issue with his specific process. A private company currently owns the northern half of the salar and has conducted DFS which shows the Rincon salar to be economical for production

Fast forward and we have since constructed 1Ha of evaporation ponds and filled with brine currently concentrating. This is enough to kick start the fast track process whereby stage 1 (150t LCE) will be producing while the company drills and conducts flow trials for JORC. (Note that stage 1 completion earns AGY 50% in the JV, Stage 2 (1500t LCE) earns AGY 75% and Stage 3 earns AGY 90%). AGY have also already been engaged with multiple counter parties in talks for an Offtake/Funding Agreement which IMO is close to completion (This could be huge btw)

I calculated (Using Enirgi Group DFS) the project has up to 120,000 T of LCE that is recoverable – A link to my workings here;

https://hotcopper.com.au/threads/ag...82062/page-1120?post_id=24835008#.WVDmpTPweRs

listed below are some pros and risks with Rincon;

PROS
- Currently 2 options comprising of 1289Ha of mining concessions (a lot less risk for AGY using these option agreements)
- 1Ha of ponds already constructed and Brine currently evaporating
- Fast tracking stage 1
- Stage 1 fully funded (about 2 – $3M)
- 3^rd party analyst calculated project to be able to produce 5,000 – 10,000t LCE pa
- In talks with multiple parties for funding stage 2 and possibly stage 3
- Pablo Alurralde is strategically aligned with shareholders to produce from the Salar
- Extensive planning conducted by PA prior to JV (he has historically produced small amount of LCE from the Salar dyor)
- Significant resource potential 120,000t LCE (rule of thumb 100t LCE per hectare)
- Pablo Alurralde one of the best Li technical experts around (Ganfeng tried to steal him)
- Company continuing to look at more concessions
- JV legally incorporated as Puna Mining Co
- PA and AGY hold intellectual property for the process to be used specifically for Rincon (will remain in house secret)
- Close Infrastructure with Electrical and Gas
- Supportive and easy to work with Local Salta Government
- PA has extended family in the Local Salta government which helps for future permits (ByTheHorns takes credit for finding this out)
- Rincon is in the Top 5 Salars for Li resource
- PA has many contacts in the construction and Li space, giving us a distinct advantage over other players
- Costs on pond construction and plant are known
- Pilot Plant site has been established ready for construction of plant which is funded already
- PA has Technical reports of benefit of Rincon and other Salars and these are in the hands of management
- Technical team already in place, Pablo as Principle Chemical Engineer, Francisco Alurralde as Engineering Manager, Francisco Menendez and Business manager, Hector Saravia and Geology Manager and Finally AGY’s Jerko Zuvela in Marketing and deal making.

CONS
- Investors yet to see the process working and remove the Magnesium which means we are still carrying some risk. (If management could provide official announcement around this it would significantly de-risk the company and get a lot more investors’ attention)
- Costings can’t be done of operating cost as we don’t know what chemical processes are involved
- No JORC yet (must use historical results instead currently)
- Not sure what grade LCE will come out


Well that’s all for tonight, this post is just a glimpse of ONE of the projects and isn’t even comprehensive – I’m sure I’ve missed some things. There are many more aspects of AGY which I will be going into over coming weeks but since Rincon is our flagship project it gets first look

Remember to DYOR and don’t just take the word of some guy on the internet