Incorrect....again. Let me explain it for you.You act as if...

Incorrect....again. Let me explain it for you.

You act as if $33k/T is the minimum price from year 1 to make the Kachi project viable. It is not.

The $33k/T price noted in the DFS is an "average Lithium price over the life of the project" with the annual inputs used to arrive at that $33k/T number in the DFS being detailed in the table below. Note the dips down to $18k/T considered in the first few years of the project's life that are outlined in that table.

Considering the $20-25k/T numbers noted by Howard as the potential Lithium price over the next 1-3 years, that would actually give Lake a better "first 5 years" (from say 2028 production start) than the numbers used in the DFS table below! Also consider that the CAPEX and OPEX numbers used in the DFS were based on average grades of 205mg/L (rather than the updated 250-260mg/L for Kachi) and the Lilac Gen2 performance (80% recovery, 3000 cycle life and double the number of DLE tanks needed) rather than the current Gen4 performance (90% recovery, 4000 cycle life and half the number of DLE tanks needed). So, if the $33k/T "average Lithium price over the life of the project" was to remain, the financial metrics of the Kachi project would be significantly improved over those outlined in the DFS....or, on the other side of the coin, a significantly lower "average Lithium price over the life of the project" could be used to arrive at the same financial metrics outlined in the DFS. Either outcome is positive for Lake.

Let's take a closer look at the price expectation.
The long-term price considered over the life of the project was $35k/T from 2032 onwards. Considering the forecast deficits through the early 2030's, it is not unreasonable to suggest that we will see prices both above and below that $35k/T in 2032 and beyond when the demand from the participating markets (EV, BESS, humanoid robots, etc) mature. As we all know, the demand CAGR (compound annual growth rate in simple language) is building much faster than the supply CAGR and the number of projects needed to satisfy that growing demand through the next decade or more is unlikely to be met by new projects considering how long it takes to get from a greenfield discovery to production. Consensus estimates are for a 3MTpa LCE demand by 2030 and worldwide supply in 2024 was 1Mtpa LCE - so the world needs to triple the amount of supply in 6 years to satisfy the projected demand in 2030. Now, some of that additional 2MTpa will come from the expansion of existing projects....but, even if we assume conservatively that an additional 1MTpa (equivalent to the world's total 2024 production) comes from existing and known projects, the world will still need an additional 1MTpa capacity from new "greenfield" projects in the next 6 years - that is 40 new projects at 25kTpa each to go from discovery (then resource definition, PFS, DFS, pilot plants, financing, permitting and 2-3 years to build a plant) to get to production in 6 years. Forty new projects! How likely do you think that is to happen? The projected supply v demand will obviously have a positive impact on the Lithium price through the next decade or two....as the unabated demand continues to outstrip the available supply.

Even with the consideration of inflation in the soon to be updated CAPEX and OPEX numbers, the revised financial parameters of the Kachi project are expected to be significantly better than those shown in the DFS - even if you were to assume a lower revised "average Lithium price over the life of the project".

We won't have to wait more than a month or two to see the updated financial metrics to spell it out....maybe even sooner!