Hi All,
After reviewing the threads i wanted to start a general discussion thread which can be used for the day to day comments and analysis. With the PSC media thread keeping us updated on lithium news and psc related news and subsequently the chart thread for all things T/A.
Figured i'd kick this off a better landing pad for those wanting a general summar/vibe of conversation and felt the "phoenix' thread may have not had the best appeal.
For items relating to Pilot Plant go here - Post #:
52681004, Post #:
52677788
NPV/MC compared to peers - Post #:
52680278, Post #:
50643866, Post #:
49407349
Recent CR thoughts - Post #:
52575047, Post #:
52478657
Country Risk - Post #:
52577453
Recent TA - Post #:
52651055
ESG status - Post #:
51459259
Path forward - Post #:
51312593
Economics review from DFS Post #:
51462497, Post #:
49855994 (recoveries increase impact), Post #:
52293071 spot price.
Chishanya REO prospect project - Post #:
48519416, Post #:
48541601, Post #:
48541973
Market thoughts - Post #:
52583678, Post #:
52583897
That should give people a fairly good chunk of background digging regarding my thoughts on all items PSC.
We know have a strong cash balance with recent CR above current price supported with leading broker which PSC hasn't had great coverage. Canaccord is at the forefront of lithium and great to have interested. They opted to take options with expiration prices double current S/P. Aka not getting paid unless this doubles.
Pilot plant progresses well and due for completion Q2 with samples likely being produced and sent in the same quarter. This helps to get current offtakers/financiers the qualifications/confidence required to stump up capital finance for construction of full scale plant.
The plant itself now being revised from the DFS. The below is the DFS for 2.4mtpa plant.
The new revised study will delineate a stage production profile. My understanding is lycopodium is performing this along with running the different iterations of modular design.
IMO we will see either a 2 stage or 3 stage project which halves or potential 1/3rd of capital cost. Given Capital costs for full 2.4mtpa was 162M USD i expect this is reduce significantly. Whilst this will reduce annualised revenue and therefore profit in it's first years it increases the likelihood of capital. Then future expansions can be funded through project profits and reduce the debt/equity we would be paying back.
All that said even a reduce production profile say half the throughput is still an ebitda around 60M USD which is almost double our current market cap annually. In full swing it's producing our 3 times our MC in profit.
Note also the good post tax IRR and NPV due to strong support from zimbabwe government.
Extremely robust case for arcadia with a couple of interesting tenements nearby as well as the chishanya REO for a left field cherry. Gold project option may soon be exercised strengthening the cash position even better.
Offtakes are in place for 100% of petalite product and 71% of lithium product. Mining Licence fully approved for production. We have ex chairman of Uranium One on board, and other board appointed connected to our number 1 shareholder. U1 (uranium 1) was/is performing due diligence for offtake and potential acquisition of PSC but this has went quiet so not sure off status.
I plan on catching up with the team in the upcoming weeks and am currently delineating a list of items i'm going to seek further clarification/commentary on.
Very strong hold for me and has provided opportunities in the short term swings to increase exposure whilst maintaining initial capital. I'm now at 3 times the holding of my initial entry and will continue to do this until we break the shackles and get a re-rate. IMO with the stage of development i think PSC could be valued up to 30-40% of NPV or higher. This is 250M USD. That's will absolutely no progress from now, but would actually align us to peers in the space and would still be half the value of australian/us peers.
7th largest hard rock project globally and we already have Bikita down the road doing exactly what PSC will do. This is nothing new, they have been exporting petalite for decades. We're be doing petalite and lithium. an SC4 and SC6 products. Some ultra low Fe for use in ceramics/glass whilst the SC6 low Fe suitable for EV market.
Finance for capital construction this year is my call. Market re-rate is soon. Market penetration is increasing. I track the hits on a number of platforms. The previous 2 announcements yielding 1100 and 1200 views p/day. The older announcements somewhere around 200/300. Whilst average views tend to decrease over time i've plotted the growth rate and exponential decay rate has decreased. In short, more people are looking at PSC now than they were previously. Eventually, will hit enough radars and get the re-rate it deserves. From there, asking for 60M USD to build a plant which in 5 years time will generate 150M AUD annualised Ebitda becomes a lot easier.
SF2TH
