General Discussion Topics, page-143037

I did try hard to illustrate this margin advantage in mining and was heavily shouted down by several ... but I think @Kevo88 was the loudest.

Mine Margin V Refinery Margin ... your erstwhile new CEO sees it. This is what he said speaking to graph. My highlighting.

"... ifwe look at where if you like economic return or economic rent has been capturedover the last cycle this graph illustrates that over the most recent period ofthe cycle, far and away the greatest portion of economic return has been upstreamrather than downstream. These are elements that we have featured and consideredin terms of our strategy. So, what does all this mean? Clearly, we're in a challengingmarket in the very near term, but we believe in the longer term fundamentals ofthe lithium market and the demand that will be there. We're also committed to movingto an integrated downstream producer - the reality of that however is - that weneed to play to our skills. Our skills are clearly around exploration, developmentand Mining - so we're very much an upstream player. For us to be able to move into a downstream we need to ensure that we've got the right skills - that means getting the right technical partner, that we get the capital intensity and the capital structure and theright financial partner involved - and that we're also cognizant of how the market is playing out in terms of both timing and linking that into our existing projects..."




He gets it. This is not a direction that SYA can go on its own (and I don't mean the PLL joint approval that SYQ needs)



Cannot see much capital being invested in any downstream activity.

Consider the guidance and where SYA is right now.
Cash as June 30 ... $91M
Capex guidance of $50M
Leaves $40M right ....

OK then you have an idea of Cost of Production overall and for the Cost of Goods Sold to PLL - that part's easy. The COGS - that includes all the stuff that is being left out such as freight - that's hurting SYQ a lot (and why integrated will eventually make sense). Looks like 2/3rds of FY25 production is to PLL and balance is spot.

Is $40M enough cushion ... 215,000t SC sold (midpoint of guidance) ... a loss of $100/t is $21.5M ... remembering in FY24 the loss was avg about AUD$145/t ... but only included freight to PoQ. And don't forget SYA has other costs for its remaining assets.

How low will LD want to run down the cash balance before he taps the equity markets. I think this will be closer than many people think. We'll see I guess.