General Discussion AGY, page-23524

I think the OPEX figure for AGY's 2 ktpa plant is likely to be a major challenge for the company in the foreseeable future. If their OPEX is as high as US$18,000 per tonne (as reported), here's how it compares to spodumene costs:

• US$18,000 per tonne OPEX minus approximately US$5,000 per tonne conversion cost (from spodumene to carbonate) equals US$13,000 per tonne.

• US$13,000 divided by 7.5 (the approximate spodumene to carbonate conversion rate) equals US$1,733 per tonne.

To my knowledge, no spodumene producer on earth has an OPEX rate anywhere close to US$1,733 per tonne. Most have costs that are about a third of this figure, with even the highest-cost operations (NAL and Mt Cattlin) being around US$1,000 per tonne.

The OPEX rate at AGY's Rincon Stage 2 project is pretty insane when compared to just about any other lithium or spodumene producer. If they can't cut that figure in half, the company's dead (IMO). Unfortunately they don't really have a means to demonstrate that they can reduce that OPEX figure, because they couldn't get the plant fixed before they ran out of cash. So much for being low on the cost curve.

All they can do now is wait, and hope for the best. Not a great strategy........