Morning MT
Yep, page 71 of the DFS, which you have posted-
Sayona Québec's offtake agreement with Piedmont Lithium
contains a volume waiver should Sayona Québec pursue the
transformation of the lithium spodumene concentrate into
lithium carbonate or hydroxide, either through the restart of
La Corne's lithium carbonate plant, or the construction of a
new lithium chemical production capacity at the Facility or
at another location. In that operating scenario, the lithium
spodumene would be allocated in priority to Sayona
Québec's transformation plant, then to Piedmont Lithium
for the contracted volume, then to third parties.
Sayona Québec is currently studying the option of restarting
La Corne's lithium carbonate plant.
For volumes contracted with Piedmont Lithium, the
forecasted prices are in excess of the maximum contracted
price of US$900 per tonne, therefore it has used US$900 per
tonne for the contracted volumes
.
I hope I am wrong, but these paragraphs spell it out for me.
The first points out the volume waiver, and that any excess spod will go to Piedmont for the contracted volume. (up to 113k/50%)
The second paragraph specifies the price for the contracted volumes, being the completely outdated 500-900.
It is no secret that I detest this offtake and it should be renegotiated. ( Please don't start this debate again guys and expend more energy on it, its done to death) Most, if not all legacy contracts in the lithium space, have been renegotiated, including PLL with Tesla. Why should ours not be?
And don't let the PLL boys fool you into thinking it was renegotiated because its coming from NAL and not NC. If that was the reason, then why has the price been renegotiated to a formula based on market prices as well? The failure of NC to get up possibly put them into a position to get out of a loss making contract, which they then used as the driver to also renegotiate the price to much modern terms..... Like what we want??? (Cue the PLL fan boy onslaught)
But for the moment, we are stuck with it.
The upside, is that we are proven profitable, even with this ball and chain of an agreement, SYAQ profits handsomely from the other half, and its for a limited period only. It is also key driver in implementing refining capacity asap.
The biggest problem I see with it, and I am still evaluating possibilities here, is the tie in with Jourdan and the possibility of a second concentrator in and around NAL.
Does this offtake continue in this scenario?
Jourdan will also want their pound of flesh...
The wording in this agreement always bothered me...
From the Jourdan announcement-
Sayona and Jourdan to enter into an earn‐in agreement concerning the formation of a joint venture
over the Vallée project covering 28 claims, with NAL to spend up to C$10,000,000 in exploration to
earn up to a 51% interest over a two‐year period.
The initial 25% equity will be earned by expenditure of C$4M in the first 12 months, with the right to earn a further 25% by spending C$6M
within 24 months. An additional 1% is subject to Sayona preparing a feasibility study and arranging
funding for the development of a mine. The earn‐in interest will be held by NAL.
Sayona and Jourdan to process mineral products produced from the joint venture at NAL’s facilities,
with the terms and conditions to be negotiated and agreed upon to the reasonable satisfaction of
both parties.
Sayona to be the operator of the joint venture
So indeed, we may have a scenario unfold where we are producing high amounts of spod from the NAL complex, maybe around 500kt.
There's no way we should entertain supplying PLL with 250kt spod, under the conditions of the existing offtake 900/t.
And that's why I commented about making sure we build refining capacity large enough to consume all that spod.
In terms of timeline, I don't think this would happen before 2026/2027, so we should have the carbonate plant built and in full operation by then.
June 2026 is the latest it must be in operation by, if we are to maintain the Quebec Government's mandate.
A mandate that was signed by Sayona and Piedmont's representative lawyers.
Although, with the infrastructure in place, they should be getting close to testing mid to late 2025.
Brett just this week mentioned the increase in throughput, possibly to 5500tpd. The primary driver is to ' feed the carbonate plant'
So, if he is aiming for a 4500-5500tpd throughput, particularly f its to feed the carbonate plant, then it must be greater than 23kt. they are planning.
I would say at least 30kt, which a few of us here have been pushing. I would say 4200-4500 in the near term anyway.
I will take the median at 5000, but if the concentration plant could take it, we could push up NAL's spod production to 300,000tpa
300kt will easily give you 30kt LCE.
Conversion should be around 7-7.5:1, thats 225 spod for 30kt
At 7:1 its 210kt spod required for 30kt LCE
At 7.5:1 its 225kt spod required for 30kt....interesting...very close to our nameplate 226. Coincidence, or Has this always been the plan?
Has Brett always aimed for 30kt LCE as the primary driver, and 225kt sc6 was the minimum required to achieve this?
Will we have left over spod, or do they dial up the sc level to 6, which consumes more ore???
( they have forecast 5.8% for conversion to carbonate)
By 2027, we may have a second refinery well and truely under way, particularly if the Amoss project takes off.
It is still in play, is obviously in Quebec and covered by the volume waiver, so lets see how that plays out.
Regardless, there will be additional refining capacity on our radar around that period...we'll just have to wait and see.
So, there's more to play out for this offtake.
For the next couple of years though, we supply to PLL and by 2025/2026 move downstream to carbonate, for me, it's a lock.
Will it be renegotiated??? probably not....
Beyond that, additional concentrators, additional refineries....we will have to see how it all unfolds, and how good are BOD are at navigating this path forward.
I do know that we will be 100% vertically integrated and Brett is thinking BIG, so I am happy to come along for the ride....
Good luck everyone....
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