It's a ' Fair and correct ' call in regards your point about ' Shared Expenditures ' and equally ' Shared Benefits ' in terms of the 75% / 25% split. And it ( the Annual Report ) says exactly this in at least 2 separate locations. However , the meter on these costs should have all ready well and truly started by now. But that's not what I am seeing in the ' Books '
So I guess we'll see how much of a ' Star ' he is when we send him his bill for 25% of ALL expenditures relevant to the Sayona QUEBEC operations.
But the question for me when I recently looked into this particular issue is whether the term ' Fairness ' is even being applied , or indeed whether Piedmont' 25% share is even being calculated.
And I say this because NOTHING and I mean NOTHING seems to Gel , balance , or even reconcile properly in the the final accounts when compared to the half year accounts and / or compared again to the March and June Quarters of 2021.
So I guess one would have to FIRST determine WHEN Piedmont actually became liable for its 25% ' Agreement ' to take up its stake in Sayona Quebec. Was it the time of the agreement when it was announced to the market by Sayona on 11th January , or was it the ratification of the Piedmont securities which had to be approved at the EGM on 10th March , or was it when Piedmont completed it's FINAL leg of its investment in Sayona Quebec as reported on the ASX on 8th June 2021 just before the Quebec courts looked set to approve THEIR NAL bid.
I say THEIR bid because as a ' reasonable ' person , I would have assumed that Quebec was well aware of Piedmont's intentions to be included on the NAL bid ' Ticket ' and that perhaps they approved it to an extent on that basis of the combined strength of the ' Joint ' bid.
I therefore would also assume that the answer to the question as to WHEN Piedmont became liable for its share of 25% of expenditures - I'd have to argue that it was at the time the agreement was announced to the Market by Sayona on January 11th .
So knowing all that , I would reckon that any expenditures and / or administrative expenses necessary in continuing with the BID and / or adding employees , working on sample purities , acquiring additional tenements to Tansim land holdings ......and other such matters would have been appropriately classed as ' Joint Operations ' .....and more specifically Joint Operations relating to the increased cost of operating Sayona Quebec. And as there is not much to the Australian Operations really.
The trouble I have though is nothing seems to agree to anything ' reasonable ' when you look at ALL the information available in the accounts and quarterly statements.
The here's the way I see it at the present moment with respects to my finding in the following analysis ......and that is that Piedmont should be up for its 25% expenditure contributions as follows :-
Sayona Quebec - Expenditures
Exploration and evaluations expenditures ( June Qtr ) : $1,800,000
Admin & Corporate Expenses ( March & June Qtr's ) :- $ 400,000
( based on comparisons to prior year increases )
PLUS :-
Exploration & Evaluation expenditures ( Sept Qtr ) :- $ 2,000,000
( $2 million has to be at least on the Quebec Operations )
Admin & Corporate Expenses ( March & June Qtr's )
( based on comparisons to prior year increases ):- $ 699.00
Total Expenditures to date on Sayona Quebec :- $4,899,000
So in my opinion , that's at least around $1,224,750 being owed to Sayona from Piedmont for its participation in its 25% interest in Sayona Quebec's operations.
But here's where I have the problems folks and where NONE of the information provided by or outlined in the accounts suggests we are ' owed ' what is fair and reasonable for our efforts on the Sayona Quebec Operations.
So as per the 1st Quarter's ( September QTR's ) cashflow statement , they spent a total of $3,051,000 on exploration and evaluation PLUS $360,000 on staff costs and another $925,000 on administration and corporate expenses.
So given that Mt Dove probably didn't start until at least mid September and given their original estimates of $2.03 million from their January announcement for spending just on Authier drilling - lets assume that $2 million of it was for Authier as I reckon that would at least be a conservative approach to the split.
Now with respects to the Staff Costs and Admin & Corporate expenses , if we look back to last years 1st Qtr cashflow expenses , we will find that this years expenses are up $73,000 for staff costs and $699,000...with the increase in admin and corporate arguably being 100% attributable to the Sayona Quebec operations.
So that's another potential total $2,72,900 of expenses attributable to the Sayona Quebec operations just in the 1st quarter to 30 Sept and a 25% share being the $682,250 being liable from Piedmont.
Now one could argue that these sorts of expenses are ' Small Potatoes ' for the Great Piedmont mining - however , the meter is surely ticking here with respects to getting a move along before the basic operating expenses get the best of you.....
So as per the ASX Announcement - 26 January 2021 :-
• Sayona planning C$2 million (A$2.03M) drilling program in Québec’s late winter at flagship Authier Lithium Project and emerging Tansim Lithium Project
However as per Note 4. - Exploration and evaluation phase - subject to joint operation (b) , they isolated a closing balance total amount of $1,839,487 with a period movement from 1st July 2020 to 31st Dec 2020 of ONLY $315,455
However in the Year End final accounts they show :- Exploration and evaluation phase - subject to joint operation (b) 2,028,885
Movements during the year on exploration and evaluation assets included $2,338,349 on the Authier Lithium Project in Canada - A further $1,893,666 has been expended on existing and new projects. Of that total, $409,65 was settled by issue of 910,318 ordinary shares in the company
Further evidence to ' a figure ' per the Annual Report is the $4,395,428 exploration costs recorded for the FULL year 2021 as per the KPI table ( see below ) and of which they only expenses $81,708 of these expenses in the Profit & Loss account as compared to $1,682,996 through the Profit & Loss for the 2020 financial year.
I also note that in the Half Year accounts , they ( Sayona ) had expensed ZERO dollars through the P&L making the $81,708 entirely in the back half of the current 2021 financial year which commenced around the time of Piedmonts agreement to invest 25% in Sayona Quebec. Whether this expense relates to Sayona Quebec is another question that is not easily determined by comparison of the financial accounts and would have to be based solely on Sayona managements word.
So according to the movement in the balance sheet ' Exploration ' assets , they had a total of $2,740,324 being spent in JUST the last 6 months alone ad which doesn't even agree to the TOTAL amount allegedly spent for the ENTIRE year on Authier of $2,338,349 less the $508,642 reported as being ' capatalised ' on what is then classed as the ' Joint Operations ' as per Note 12 in the Annual Report.
That would mean then that for the 6 months from January 1st to 30th June 2021.... and the MAIN period of which you would think expenses would be either expensed or capitalized , and definitely incurred on the Quebec Operations , is not even recorded as such with at least $2,231,682 being on ' Other ' exploration projects outside of Authier in these last 6 months. ( ie $2,740,324 less $508,642) .
So not only that , but also $1,829,707 relating to the ' Joint Operations ' appears to be being reversed out of the joint operations which could only mean that they in fact relate to the prior half year period to 31 December and are NOT related to the period commencing from the agreement with Piedmont.
Quite frankly , I find that hard to believe that all we spent on the Sayona Quebec side of the ledger was just over half a million bucks in the entire back half of the 2021 financial year when everything and anything was going with the Company was on NAL, Authier , Tansim et al.
Even the planning for drilling at Authier and Tansim would have attracted more than this amount in my opinion.
So you can be the Judge yourself - but what I did further to looking at the Annual Accounts and 1st QTR of the current financial year , I looked back on the 3rd ( March ) and 4th ( June ) Quarters so as to just compare what was being spent as against what was being told to us .......PLUS what was being spent as against what had been incurred for the same time last year as a gauge against the increase cost being incurred from the ' Quebec ' operations.
Here's what I found from that exercise as well :-
March QTR 2021 per Activities statement :-
• Battery researcher, Novonix Limited, to test Authier product’s potential for 99.97% purity lithium hydroxide battery
• Tansim Lithium Project in Québec further expanded, with new drilling program planned for both Tansim and flagship Authier Lithium Project
• In Western Australia, gold exploration advances with airborne magnetic survey completed at Deep Well and Mount Dove projects
And per the cashflow statement , they claim they spent a total of $531,000 on exploration and evaluation expenditure for the Quarter with $135,000 in staff costs and $423,000 in admin and corporate expenses. This compares to QOQ figures same time last year of $637,000 on exploration , $135,000 staff costs ( same ) , and $192,000 in the admin and corporate category. So again , it is arguable that at least $231,000 in aditional corporate and admin expenses had to be related to NAL and/ or its BID , and the overall Sayona Quebec Operations.
OTHER COMMENTS IN THE MARCH Quarterly Activity Statement :-
In March, Sayona reaffirmed confidence in the lithium potential of its Tansim project following the compilation of a Canadian National Instrument (NI) 43-101 Technical Report, which concluded that the project’s exploration potential remains high and that the potential to increase the size of the currently modelled pegmatites is also high (refer ASX announcement 18 March 2021).
O.K so I assume this would have cost some money to compile this JORC equivalent type report . And not only would it have cost a bit , it would have also been valuable information in re-affirming Piedmont's intent on investing it 25% stake in Sayona Quebec.
During the quarter, multi-client airborne magnetic's data over part of the Mt Dove area was acquired. The successful use of this data in detailing geology, structure and exploration targets has encouraged Sayona to commission Magspec Airborne Surveys Pty Ltd to carry out a high resolution airborne geophysical survey at the Deep Well and western Mt Dove project areas.
This 3,900 ( 3,903 ) line km magnetic and radiometric survey, with flight lines at 50m spacing, commenced in late March. It is anticipated results will be available for detailed review and modelling in mid-April.
High-resolution multi-client airborne magnetic data has been acquired over the eastern portion of the tenement. The Magspec airborne geophysical survey at Mt Dove totals 983 flight line kilometres. When completed, it will provide geophysical coverage over the whole of the Mt Dove tenement and facilitate planning for drill testing of magnetic features, structural zones and geological targets. The Magspec airborne geophysical survey covers the whole of the Deep Well project area, and comprises 2,920 flight line kilometres.
A total of 96 orientation soil samples have been collected over three magnetic features at the Deep Well and Mt Dove projects. Analysis by LabWest using the CSIRO /MRIWA ultrafine technique has been completed, with results ranging from below the lower detection limit (0.5ppb Au) and 5.6ppb Au.
O.K so given that Airborne magnetics surveys can cost between $50 and $100 per line kilometre based on 100 - 400 metre line spacing - Sayona's purchase of this information given it is based on 50 metre spacings , lets go with the higher cost per line kilometre of $100 and call the expense in obtaining this information at $A 390,000 .
They also mention in the March Quarterly that :-
Piedmont and Sayona have committed to downstream processing in Quebec, taking advantage of its environmental and economic advantages including low cost, renewable hydropower, an established mining services industry and proximity to the North American battery market, where it will form a key part of North America’s supply chain.
Concerning Authier’s EIS, Sayona received further feedback from Québec’s Ministry of the Environment and the Fight against Climate Change (MELCC). The follow-up questions covered such areas as road access, flora and fauna and air quality, as per normal for a project of this nature.
June QTR 2021 per Activities statement :-
• New drilling campaign underway at Authier project, with goal of expanding resource and enhancing profitability
• Testing shows Authier spodumene capable of being processed into high purity 99.99% lithium hydroxide
According to the June quarterly , you'd have to argue that most of the activity being spent was on ' All things and Matters of Quebec ' with a MASSIVE $1,800,000 being spent on exploration & evaluation a $176,000 on staff costs , and $314,000 on administrative and corporate costs. This compares again to same June QTR in 2020 of $936,000 of exploration and evaluation , $102,000 of staff costs and $112,000 of admin & corporate costs.
So again there would appear to be an additional $202,000 of admin and corporate cost - most likely on account of the extra costs emanating from the added hiring's in Quebec. So it then begs the question as to which project would have had spent $1,800,000 on. And given that the Aeromagnetic cost seem to have been predominantely in the March QTR with drilling not even commencing until the September or even December QTR , the likelihood that it is as as result of the combination of Authier Drilling commencing , Tanim acquisition , and Authier / Novonix continuing sample expenditures are definitely the more probable in my opinion.
This then leads me to the same questions as to WHY is the Annual Accounts/ Annual Report showing so little of expenditure being allocated to ' Join Operations ' which would of course attract a 25% contribution from our good FRIENDS at Piedmont........
And there is absolutely NO WAY we spent $1,800,000 PLUS another $3,051,000 on anything other than Sayona Quebec operations. - ie on Just the Australian operations. Remember that EVERYTHING except Moblan which didn't even happen until une of Sept early Oct was and could only have been the Sayona Quebec Operations.
So we're either being played here with respects to the adjusting ( reversing ) entries in the Accounts or its NOT being reported properly or prudently. It is for all intensive purposes a JV .....so it should be accounted for in the same manner as a Joint Venture. - ie detailed and separate financials.
(20min delay)