So many errors in such a short post, but while new to HC posting...

So many errors in such a short post, but while new to HC posting others may think the same thing. The grade and cut-off are two integrated metrics so an entity has the choice of using a lower cut-off grade and reporting a smaller resource with a higher grade or reporting a larger resource with a lower grade. GT1 decided to go with the later, presumably due to their internal modelling showing that this was the point when the economics twisted and it wasn't worth putting ore below 0.2% through concentrating infrastructure. If this modelling is robust, using a lower cut-off is a good rather than bad feature. GT1 will obviously review that decision with each mineral resource upgrade noting its depending on both anticipated operating costs and anticipate Spod prices. For overall mining economics you should realise that Seymour could also be viewed as 7.3Mt at 1.27% with a 0.6% cut-off. This alternative view would still put Seymour it double the size of Core's Grants mine (and both use DMS).


Flotation vs DMS
There's a big difference in the capital cost of DMS vs flotation. Recent Australian projects with high capital costs on modest resources (ESS, GL1) have both been Flotation projects. The huge cost overruns for LTR are on an underground flotation project. The less complex flow sheet of DMS should lead to lower operating costs, but this can sometimes be offset by lower recovery rates, particularly if the operation should really have been flotation but they took the lower capital cost DMS route but I digress. In determining the cut-off rate, GT1 will have worked out the marginal point where ore is profitable to process for the expected final sale price. If GT1 reduces its anticipated sale price that cut-off may increase to 0.3% or 0.4% but I wouldn't expect 0.5% or 0.6%. GT1 is a primarily DMS project but Primero has established there is additional value in a phase 2 back-end flotation project so as to also recover lithium from fines and increase output for the planned hydroxide plant. Recovery rates inclusive of flotation processing of fines will improve beyond the current low 70%'s modelled. High recovery rates will be a big factor in improving GT1's economics.

Grades that are economic
Hoopz has produced the graphic below. GT1 is in the middle of a cluster of smaller projects that are at explorer, scoping or DFS/BFS stage. If you incorrectly hold the view that due purely to GT1's size/grade combination its not economic, the same would apply to most of these other similar size, similar grade projects.


Price points and economics
At some price point all projects are uneconomic. Spod at US$400/t was not economic for many providers except Greenbushes and would have delivered zero industry expansion as providers were closing down. US$400/t is so far left to the left of the cost curve its an irrelevant price point - except for those trying to make out Lithium prices are now too high. I would suggest stopping reading Goldman Sach's reports around price forecasts as they break basic rules of economics and have a bunch of other issues, but at US$800/t there wouldn't be much profit for GT1.

Current studies being released are using higher Spod prices than GS estimates and at those more sensible prices I believe GT1's project would be producing very economic returns before factoring in its ambitious goal of getting both a mine going and building Hydroxide capacity. For example PLL's recently updated Tennessee Hydroxide study assumed it was going to need to pay US$1,600/t for SC6. Plug in 25,000 * $40,000 into a calculator and that's the potential annual USD revenue from GT1's planned Hydroxide plant (using a higher but possible Hydroxide price).