Apologies it's taken me while, but got a bit busy with other things... read 'em and weep.... well actually, nothing to weep about here
Caveat: these are my own notes. I'm fallible but have done my best to accurately capture the the key elements of things discussed.
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AM chaired the meeting.
JZ, Mal Randall and Andrea Betti were in attendance. Ranko Matic was unable to attend.
All resolutions were passed and the meeting formally closed at 11:20.
JZ addressed shareholders and covered off several things and then numerous questions were taken from the floor.
They were very generous with time, and no one was rushed or cut-short.
These are my interpretation of what was discussed in no particular order (including both JZ’s address and the questions).
First things first, in summary:
Land Acquisitions: These are close to being finalised and I expect we’ll hear about them shortly.
BG LCE and JORC: These are still targeting the end of May (I specifically asked about this issue and the importance of managing expectation about these).
PEA: Realistic timeframe is June/July.
Off-take: Things are taking time, but are progressing well and looking very positive (eg have met with large conglomerate in both Argentina and Perth.)
Stg 2 Plant Construction: Still targeting construction commencing in Q3 2018, expect max of 15 months to complete.
Stg 3: proof of process + life of mine + economics will all culminate to advance Stg 3 funding/investment.
Fast-track strategy
AGY remain committed to current fast-track strategy. Peers and interested parties in Argentina and Chile are closely watching and starting to follow this process. AGY appreciate shareholder patience and support and this coming year will see a lot of goals and achievements realised.
Process
The time taken now over the plant process is intricate and time consuming, but once established are comparable and scalable, ie it’s a modular process that will build future stages on cost/output/revenue at a scalable comparison.
Once plant has been proven over 10 - 20 tonnes, the process will be spot-on and scaleable and AGY can move on very quickly from there.
JZ gave a good analogy of the process and Australia II winged keel. Australia II were the little Aussie crew who came from behind and won. By keeping the winged keel design “secret” it’s given them the edge to be winners in the end.
Rincon Brine
Claims of about the non-viability of Rincon is not a major concern. Preliminary in-house testing suggests they can meet BG LCE standards; not just now, but through future stages.
The brine is very homogenous - which is favourable and better enables a consistent end product.
Product Quality
The process objective is to not only produce BG LCE, but to prove consistent, reliable, and quality product. This will make AGY product very desirable to large conglomerates, as it means they can set up their process with a consistent reliable source (quality, efficient production lines are the key for clients to ensure battery quality).
Stages 1 and 2 Capacity
Both Stg 1 (500 t/pa) and Stg 2 (1,500 t/pa) plants can operate in tandem, ie a total of 2,000 t/pa. Note: JZ did indicate it may be possible to increase Stg 2 - but I suspect they are waiting on finalising the process before investigating this further.
Forecasting LCE Supply and Demand
In AGY’s opinion, analysts are underestimating future supply and demand and failing to put feet on the ground in places like China and Korea. JZ referred to Howard Klein as a good resource for anyone interested in further researching this issue.
Argentina political unrest
At this stage AGY don’t see this as a significant risk. Wages are stagnant (which is a positive for AGY), significant costs are in $USD. Royalties in the Salta are currently 3%, and the local government is very supportive of AGY and appreciate/value the stimulus AGY bring to local economy, eg local contractors, pump operators, accommodation, site supplies, etc.
Funding
I found this discussion interesting, as I believe it helps to better understand the longer term play for future stages.
Local big banks have been slow to come to the lithium party, however this is starting to change. Funding in Asia and the Middle East is a lot cheaper and Global brokers are starting to pay attention to AGY, eg Bank of Montreal, Bloomberg, Deutsche Bank.
IMO - the key to unlocking this funding/interest is the PEA and a proven process.
