The discussion is probably important to have around timelines so I thought best we just put some understanding down for all. Some may disregard this, whilst others will see it as informative. At the end of the day timelines to mining are about demand/supply anyway.
I guess anyone wanting to understand mining decisions and the interactions with mining approvals need to do own research to these following questions - all the below is IMO IMO IMO:
1. Are decisions to mine made sequentially or concurrently? The answer to this question gives you the proper timeline for AVZ, so I'll let yourselves research that.
2. What discussions do readers here think happen between miner and government before a company releases a DFS, given the actual guidelines around DFSs by the ASX itself?
3. What discussions do readers here think happen between miner and government/community before a company applies for a Mining Lease? (Hint - what documents are lodged as part of a Mining Lease application?)
4. AVZ has indicated Stage 1 of its project is the export of 700,000 tpa of 6% grade spodumene, which is what happens at first production. Stage 2 is whereby they export about 550,000 tpa of 6% grade spodumene and 45,000 tpa of sulphate.
So if AVZ has slated a production date of 2022/23, then when does first construction have to start to meet that production date target? The answer to that gives readers when things have to be done by.
5. How do readers think DRC government, who has a a current 30% stake in the project will act and which entity actually is legally required to lodge the Mining Lease application, Dathcom or AVZ?
6. Before a Mining Lease application, and documents attached to a Mining Lease, what work is required to be done before lodging a ML application? And what are the rules around grant of a ML in the DRC? (Hint - there is in effect a 'funding' commitment issue as well which basically says a ML is essentially granted when you are able to demonstrate you have the finance to do the project btw DYOR - which in itself only states the obvious as without funding and Offtakes mining is unlikely to take place). Those types of requirements are not that dis-similar to other jurisdictions IMO on when to apply for a ML and when a ML is granted IMO IMO IMO - i.e. I mean try applying for a ML in WA without doing anything, having no funding, no offtakes, no commitments and see where that lands you.
7. A point a while back about drilling in the pits. Question for readers: Why was the initial resource in the pit deemed effectively 'waste' in the DFS as defined. Hint - the resource wasn't in the measured and indicated category to move to the 'reserve' category is the answer. So the drilling is required to prove the resource up so that it becomes mineable and part of the mining plan that underpins the Mining Lease as well. Now do readers here think that mining the resource immediately in the pit will improve the DFS numbers or not as AVZ didn't need it anyway, noting SEZ and remmittance of VAT will improve financial metrics anyway? Do readers think it would take endless time to readjust a mining plan - the answer is no it won't as the DFS itself has an indicative mining plan IMO IMO IMO
(Noting IMO IMO IMO you can still base the mining plan on the DFS itself btw and any contract negotiations would simply view IMO IMO IMO that drilling and tweak of the plan, as just that a tweak, but for a Mining Lease well need to have it defined btw given that is the first resource now to be mined and processed).
Some answers to the questions above from my interpretationAs part of the Mining Lease process, you need other approvals. I note, the latest AGM presentation talks about ESIA approval for Hydro Electric Power Plant, as well as the ISS EISA been submitted (which you need to do before applying for a Mining Lease). People can work out the acronyms but seems a little similar to WA requirements btw - submit impact statements, prove you can mine the project as well meaning you have capacity to fund, they are assessed and then a ML is granted etc etc
You can also do things concurrently is my point - as you do in Australia for example - but if people here are really into 'process scope', the key before FID is clearly Offtakes and funding, and those two elements need to be locked in before FID btw. Oh, the latest AGM presentation talks about licencing/permitting/Offtakes and FID been done concurrently. FID done by end 2nd quarter.
Here are the two key things in the ANN:
and
Your financiers and Offtakers especially, need IMO IMO IMO some assurance that the project will get to production in the required timeframe, meaning issuing of a timely mining lease. And the market must believe you can get to production on that date.
Again, what shareholding does the DRC government have in Dathcom? IMO IMO IMO, Offtakes themselves will have clauses around timelines, and I suspect funding itself will also have timelines attached as well. Noting funding itself isn't drawn down until construction starts.
On a concurrent basis if AVZ wants to be in mining in 2022/23, it needs
at the latest IMO all approvals done including grant of the ML, Offtakes secured and funding dusted which needs to come before everything else, FID done/ML granted by mid 2021 is my point, with first construction commencing 3rd quarter 2021 (which is what the above shows as well).
Notwithstanding again DRC government has 30% stake, read again 30% stake, possibly down to 25%, in Dathcom, the holder of the Roche project btw. I am far less concerned about the ML application for AVZ given what I have said above and noting a process has already started that are the forerunners to mining approvals - Offtakes and funding the key, even in relation to a ML application in DRC. Noting AVZ has already started the documentation process - particularly the ESIA by the looks of it - that needs doing as part of a ML application anyway. Without Offtakes and funding project timelines are pushed out - these are the two key ones.
My view in the past is I suspect first production will be 2023/24, which I have stated my reasons for before which were supply/demand driven so will be pleasantly surprised if it is indeed 2022/23, but that is not the discussion here. Offtakes can be signed years before first production starts as well btw - case in point, when were the Offtakes signed by buyers and when was first production from the Gorgon project (i.e. this is an extreme example btw but gives you the gist of Offtakes can be signed several years before first production).
Ultimately the 2022/23 entry to market requires a supply gap to emerge, and the key to that is likely to be Europe/USA getting their act together IMO IMO (as well as China's EV demand increasing). Time will tell, but from my perspective AVZ has often been very bullish in its timelines, and this time round it will need to deliver on its latest promises given the sea of green people are seeing in other lithium stocks.
Anyway, ML are given out when other boxes are ticked is teh fundamental point to the above, but things also progress concurrently. Posted to inform the forum my views. Obviously at the end of the day the specifics lie with AVZ, so all the above is IMO IMO. It is up to AVZ to inform SHs where things are at - the AGM presnetation allows one to infer where they are at, but at the end of the day it is always about demand/supply here, as that is the driver of Offtakes and therefore funding. The supply gap emergence and when AVZ can enter the market is the ultimate driver of timelines, regardless of teh fact the DRC government has a large stake in the project itself and ultimately also benefits from project devlopment, as does AVZ through Dathcom.
Anyway, DYOR.
Anyway, I don't think anyone on this forum can give a definitive answer - only AVZ can. As I said, approvals can be concurrent to pursuing Offtakes and funding, which are forerunners to FID itself as per the above slides. Not dis-similar to how projects are done in WA, albei approval processes can be longer in WA especially if the EPA gets involved in WA and a project is hit with Native Title etc etc etc. But concepts similar.
Just my views IMO IMO but everyone needs to DYOR. Yo shouldn't be relying on HC for your investment advice so treat this post as an inititiave for DYOR is my point.
All IMO and again all the above is IMO IMO IMO
(20min delay)