Thats all correct, however there are some negative (perceived)...

Thats all correct, however there are some negative (perceived) aspects that have crept into operations that have impacted valuations and prompted valuations/recommendations to the downside.

The key takeouts from this are that total operating costs have run away at a 113% increase! (which excludes royalities. If it was cif it would be a 149% increase but it isnt really reflective of ops). There is some speculation that this is the new norm. Indeed PLS consistently reiterates "ongoing inflationary pressures". In relation to this, PLS reports unit operating costs after pre-strip expenditure by including it as a credit. On a unit basis this implies a unit cost of ~A$750/t without the pre-strip added back for FY24. The current strip ratio is around 8 compared to DFS at 4. This is impacting costs but it can be explained away as these costs are in preparation for P680/1k. Nonethless there are questions being raised on these cost escalations in the market. In my opinion these concerns will be alleviated once P680 is completely dialled in as they are getting some cool new ore sorting kit which should improve recoveries and eventually bring down costs (refer TOMRA and Primero who will do the install). All of this is against a backdrop of falling prices and LT forecasts of $1200-$1500/t. EBITDA of 82% is not the same as 50% or lower so it going to impact vals and sentiment. This is the stock mkt.

This whole CMF review is a bit of a red herring. The current policy is what it is. As fcfs will decline this year they'd have to adjust the payout ratio to achieve a higher distribution. Unless they do a special dividend or buy back then they can make that decision now and there is no need to wait for fcfs to roll in. This keeps being speculated about in the mkt but its possible that PLS is holding out for some sort of corporate activity as opposed to doing more thinking around captial return options. There are a lot of opportunities based on the lassonde curve such as CXO. LTR also comes to mind when they too realise they dont have the expertise to mine spodumene, even if they contract it out. While PLS doesnt need more sc, arguably that was true before Altura. Thats even more clear now even the reserve upgrade. We are investing through a period of time where it has become clear that producing LiHO is hard to do in Australia even with Chinese partners. Ellison has gone so far to say he doesnt want to do it anymore thanks and instead Ill produce a salt. So maybe more sc is the way to go and leave Asia to do what theyve been perfecting for the last 15yrs. As far as Im aware the margin remains with the miner, so lets stick with it.

Anyway a heap more pain is to come, unless China can magic its way out of this one.