Hey RiseAbove,
Always happy for good quality discussion, at the end of the day that is what HC is all about. I thought I had cleared up the uses for Small, Medium and Large Flake Sizes in my previous posts last week, but I'll word it in a different way.
I'd start by saying there is absolutely NOTHING stopping a company utilising Large flake for conversion into PSG and ultimately within Lithium-Ion Batteries.
The Key drivers in traditionally utilising Medium and Small Flake sizes relate to obtaining better recoveries within processing and most importantly better cost margins.
1) When considering pricing of Flake Graphite, traditionally the larger the flake size, the higher the obtained price.
2) When converting Flake Graphite to PSG through Micronization + spheronization, the larger your flake size, the higher the cost of production
When you consider Points 1 and 2 above, there becomes an inflexion point whereby it makes 0 financial sense to convert large, jumbo or super jumbo flake into PSG (IT CAN BE DONE, But in terms of pricing and costs, it makes no sense). You are better off just to sell jumbo and super jumbo flake as concentrate and obtain a premium for the product.
Your second point regarding throughput / production run rates for Stage 1 and Stage 2 of 825 Ktpa and 1.65 Mtpa respectively.
Dave's words are that the revised DFS will be investigating a "Substantial Increase in Stage 1 Capacity". Given the only bottleneck in selecting the 825 Ktpa throughput was expected demand when the numbers were run in 2019, the game has changed dramatically. I guess we will await the 2022 Revised DFS to determine what run rate the company is going with, but with 60 Ktpa of Offtakes locked in, I'll bet my left nut it is larger than 825 Ktpa
Your 3rd Point regarding Life of Mine of 22 Years being quiet Low, I agree 100%. The only bottleneck in what you can model within your feasibility study is the drilling data onhand and a good mining engineer should only be utilising Measured and Indicated Resources as inputs into the Mine Design Process (Inferred should be treated as waste, even though we both know their is significant potential to upgrade inferred to a higher category and potential to identify additional resources as I touched on last week). This leaves us with 55.3Mt that currently falls within the Measured and Indicated JORC categories to play with at present.
Me personnally I would model the maximum tonnage ASAP within the mine life, provided there is underlying demand for product. But hey what would I know, An Undergraduate and Post-Graduate Degrees in Mining Engineering and 15 years under the belt I should have the Optimisation and Mine Design down pact by now
As for the PEPR Approval Application for XX Hectares at XX Throughput over XX Time Period. This is one aspect of Mining that many not in the game often overlook. Once a company receives its primary approvals for Clearing Vegetation and commencing construction, the approvals never stop, they change and grow just as the business grows. The approvals team usually starts work a good 5 years before the 1st truck arrives onsite, they are there throughout the life of the project and they continue working long after the last truck leaves site until the Government is willing to close out the operation post-closure.
The 1.65Mtpa throughput is already in the rear view mirror IMO. I would anticipate Amendment #1 will occur 18-24 months after the site enters operation. The scope will increase, the required land clearing will increase (Project envelope), the throughput will increase and the output will increase. Just the way every large project in the country operates.
(20min delay)