If you are really comparing the two, LTR’s resource grade is higher than SYA’s. Also gotta look at the resource size (see below) - KV alone is 156 MT at 1.5% Li2O - add to that Buldania at 15 MT at 1% Li2O. Comparing these against SYA, the Abitibi Hub has 87.8 MT at 1.05% Li2O and the Northern Hub has 51.4MT at 1.31% Li2O.
Also the $900/tn contract with PLL doesn’t help as the current spod price, which is far from their highs, the current price averaging $3,700/tn.
All in all, it all boils down to the net profit from the sale. SYA is producing 226,000t of spod per annum, out of which 50% of the production is contracted to PLL at US $900/tn. That leaves 113,000t of spod per annum to be sold at market prices (say US $4,000/tn). That’s a total revenue of circa $556 million per annum from the sale of spod (before the hydroxide plant is commissioned).
Now looking at LTR’s revenue, in the first year (2024), from the three off takes plus selling a small amount in the spot market, approx. 500,000 tn of SC6 will be sold. Again, applying the same sale price of US$ 4,000/tn (assumed above), the total revenue in the first year from the sale of spodumene is US $2 billion. That doesn’t even include the revenue from the DSO (which could be used to offset the cost blowout on the CAPEX due to inflation etc). For the construction of the mine, LTR had A$450 million cash and has a A$300 million debt facility from Ford.
Coming onto the costs for SYA, one advantage SYA has is the debt for NAL is nil. The total cost of production as per the latest DFS (C$817/tn) is US $602/tn. Adding the cost of sustaining the capital and miscellaneous the cost per tonne averages to be US $700/tn. The overall annual profit before taxes is approx. US $400 million per annum. Unfortunately the high SOI doesn’t help and the EPS works out to be approx 3 cents.
LTR’s cost per tonne from the DFS was approx. $450/tn. However, accounting for inflation etc and taking a more conservative approach and applying the same figures as above, the total cost of production per annum is US$ 350 million. That’s a profit (before taxes and WA royalty) of US$ 1.65 billion in the first year of production. Say we deduct another US$350 million to pay off the Ford debt and the difference in cost escalation, that’s still a profit of US$1.3 billion in the first year of production before taxes. With an SOI of 2.192 billion, the EPS works out to be approx. 70 cents.
Not a financial advice. DYOR.
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