I think cost per tone will be down quite a bit this quarter and...

I think cost per tone will be down quite a bit this quarter and even further in Q2-25. If you look at our annual report one of the items that they highlight is inventory. Inventory is broken down into 3 area's "Raw Materials", "WIP" (work in progress) and "Finished Goods".

I am focusing in mainly on Finished goods inventory because the value of finished goods basically represents all of the costs incurred in making that. Today we only have 1 finished goods product and that is spodumene concentrate.



Our finished goods inventory at the end of June was valued at a bit under A$37 Million, we also know from the Q4 quarterly statement that we had a finished good inventory of 31,079 tones.


so we can take they value of the inventory and divide it by the number of tones and get a fair approximation what the cost per tone will be. A$36,928,000 / 31,079 = A$1188/t - This equates to US$ 795/t .

In order to back test this I went back to the 2023 inventory value and performed the same calcs. 37,165,000 / 29,610 which came out to be A$1255/t. I took a look at the unit cost that was stated in the Q1-24 quarterly to see how close that came out to be and found it to be A$1231 .... so actually a bit lower than my calc but close enough for me to feel like this should be the same math this year with a +/- $50/t .





We also know that the Jaw Crusher will be first utilized in the production process in Q1-25. I don't know what the cost savings that are possible with this equipment but I have asked a few people that work in the mining industry to try and give me an estimate of what amount of cost could be saved per ton once this equipment is in use. The estimates I got were anywhere from us$65/t to us$110/t.

The saving applied to the jaw crusher will be realized most likely in Q2 not Q1, so I am thinking a unit cost of us$795 in Q1 and a unit cost near US$700 in Q2.

As has been pointed out by a few here, even if we get our costs down to $700, we will still need to see our realized price rise in order to start reversing the COH at the end of each Quarter.

Seeing a few green chutes yesterday and today is encouraging but we really need to have some long term growth in order to really see a recovery.

GLTAH

Split