Good News & Bad News, page-496

Andyrooo
Selling 1.2 mill tonnes of spod with a $400 gross margin equates to $480 mill. Selling 600kt of spod with same margin and 90kt of hydroxide with a $7,000 gross margin equates to $870 mill. An increase of almost $390 mill per year, yes, per year.

Yes the question is, how do they get there, my answer is incrementally. It's not impossible, PLS just need a a couple of good years under their belt, POSCO JV now then move on to larger 50/50 JV conversion operations, targeting that extra $390 mill EBITA pa, which would likely payback PLS share of JV capex in 4 years, maybe earlier, dependent on the finance mix.

Would you invest your hard-earned to fund a new and separate entity (Newco Chem), which could accommodate partners and their capital injection, etc. Of course, Newco Chem would have binding offtake agreements with Pilbara Minerals Ltd, providing the feed for the 90kt hydroxide operation, selling that feed to Newco Chem at market prices, maybe include a floor price . When current spod offtake customer "agreements" are nearing their renewal date, add more hydroxide capacity at Newco Chem and don't renew those spod offtakes.

Chase that goal, go hard, or stay home, AIMO, DYOR.