Thought I'd add a bit more perspective to the shipment date that you -
@shades2 and
@Thesi - are talking about.
I guess you are using Canaccord's projections - and your own cool-headed logic - here to guestimate the reduced shipment amount or production available in December. Even the idea of being close to Xmas makes you think of running out time to get all that sheet sorted. That list has to be checked twice n'all....
OK.
What we do know then from the same Canaccord report is that there is 150kt on the rom pad - and they describe this as "sufficient volumes of material available for commissioning and initial production".
http://www.galaxyresources.com.au/Investor/reports/160815CanaccordUpdate.pdf
Page 3.
Canaccord were also still estimating that a December Q shipment was projected, despite the fact that their accompanying graph does not seem to bear this out, showing the 23kt that you're using to estimate a half-shipment.
This amount also ties into what is currently on the rom pad (from my quick calculation).
As the different circuits come on line and fully operational in November (apparently!) this may not represent the actual limitation of the December shipment. Canaccord said that Galaxy believed the circuits would be running at higher recovery. Canaccord used a more conservative figure. Fair enough.
The 6th September announcement states that the mine circuits should be fully operational in November.
I can't put my finger on it now but wasn't there an announcement that blasting had recommenced?
There was also a large amount of raw ore (can't remember the figure now). Presumably some of this is still hanging about and is/will be used to feed the coarse circuit as it recommences. This circuit has already been upgraded and they were already running it separately."Feed classification" - sorry blanked on what that means too - it's late - isn't that the fancy term for crank up the conveyors? That apparently starts Monday.
We know that the old fines circuit had been commissioned and operational and my assumption is that the material on the rom pad and the ease of its further processing is the reason for the guidance that a December shipment is likely. At least some of this material is the same concentrate that Mt Cattlin was shipping as finished product before. Getting this old circuit running was part of the jv requirements for GMM. When they satisfied this and finished the first production run they upgraded. This upgrade occurred in stages, commencing with the coarse circuit. For at least part of the time this was running whilst the fines circuit was being upgraded.
Those that don't believe that the rains hindered/halted the upgrade process - well there is no point in reading any of this. Canaccord are therefore not be believed either. Nothing is to be believed etc...
Their report verified that this had happened. They also showed enough independence to dispute some of Galaxy's projected figures and use their own. Their reputation is on the line too when they produce one of these reports.
If you look at the schedule of commissioning there is a month between 2 items.
Have GXY given themselves a little wiggle room to deliver this faster than they guided?
To have more production time?
Lord knows any more over-promising would be extremely upsetting to many.
If we take Canaccord's assessment as being accurate then Galaxy is already under-promising by stating only 160kt for the amount they produce next year. Cannacord estimate 200ktpa for 2017 and 230ktpa for 2018 onwards. The 75% recovery rate for the second half of next year theoretically could produce even a little higher than that - perhaps 240kt - and 80% was outlined as possible depending on whether they invest in a floatation circuit.
I have studied only a tiny bit about floatation circuits. Galaxy is currently what they call a gravity-fed plant. PLS and Mt Marion will apparently implement floatation circuits. Will be interesting to see if these present problems as they introduce potential toxic environmental issues that require safe-guards and permitting.
The new output estimates are well above the figures we used to knock around before.
We had been talking about 120kt - 160kt as possible from the 80kt they were talking about when the mine opened.
The new estimates from Cannacord are that from the first 2 full calendar years of production 2017-2018 that the mine will have produced 430kt.
Or more than the equivalent of 3 years of the old 137kt in 2 years. And approx triple the figure that was being used by the company at the beginning of the year (80ktpa).
Without the upgrades it looks to me that the company could have sent off the shipments, laced with historical high mica and achieved its initial targets.
Now we will have a better mining operation and a less contaminated product at a higher grade.
This mission is to get Mt Cattlin set up to right.
It will be the finance engine behind Galaxy. We don't want to be revisiting it in a year's time. Get it done now.
Steady state 230ktpa - even if the current pricing is maintained (and $200USD is removed in costs) results in $400 USD/t profit = $92m USD or $121m AUD. My costs are probably high and I've remained bullish on higher pricing 20%+. As have you
@Thesi. We have only made supply tighter by being late.
Anyone that had done due diligence on the previous mine would have known that there were question marks over the old fines circuit and it's mica impurities. Solving this now produces a product that will achieve a high bench-mark for an excellent commercial operation that will be achieving extra efficiencies as the other mines are still coming up to realising how insanely complex these plants are to finance, build and commission.
And then get clients. And then get their cheques from them.
Do you remember some of the posters a month ago talking about how the mine was going to be 100% late.
Do we cut GXY any slack for the fact that they are doubling the output - is year 3 output going to be 33% early because of the higher output?
How late is the competitor's mine that has not been built yet? Is that 12000% late?
How much earlier are we going to be than them - 800% earlier?
I'm just faffing around - but you know what I mean.
How late are you if you're the first one to arrive at the party? Answer: Still on time. Lonely - but still on time.
If we take the long view - then at some point there will be other things that frustrate holders of this company.
Any company.
To hold them to account so viciously at the very beginning - when this company is in the position to be the best set up for when the boom really kicks in - that seems absolutely petulant.
If you believe in lithium then there are 3 producing stocks in Australia. I'm not going to compare them any more right now than to say that I'm happy here. Was happier a couple of months ago...Will be happier in another 3 months. Will be freaking bouncing off the wall end of next year etc etc
We are early on the scene, at the first stage of production that all juniors would love to be at - fine tuning the plant and readying for the first shipment. There are stacks of investors in these juniors. A lot of them are down 50% already too - without even a light at the end of the tunnel. What disappointments and delays lay ahead of them too? What catalysts do they have to make headway? Ours are defined by near term shipment and production and progress on our other assets.
This is what investment is all about. If a person is prone to acting emotionally and is naturally impatient your money will be taken from you by those who have better self-control. If you have already formed a view of the negative view of the company or sector that nothing will shake - then it is time to move on.
We are spoilt in comparison - its just being so close now that makes the impatience that bit worse.
