Ha! Well played!
Alright, let's retrod this ground again (
@Thesi posted about this a month ago)
https://hotcopper.com.au/threads/lpd-share-price.4241887/page-39?post_id=33707347
1) Lots, but I assume you're talking about the nickel one
2) The chairman, Martin Rowley
3) The mine? The mine will produce nickel in abundance? (not really relevant to L-Max)
4) The processor will produce and use sulphuric acid, which is relevant to L-Max
5) A mix of reasons.
Firstly, you're closer to both the sulphuric acid supplies and to the by-product customers.
Yes, a sulphuric acid plant in WA would reduce the capital costs, but it doesn't deal with that $19m deficit, which is caused by the logistics costs for the by-products, and I have discussed in this post:
https://hotcopper.com.au/threads/lpd-share-price.4241887/page-57?post_id=33722851#.W0p-ddIzaUk
And that $19m would have been done on a P1 production of 2000-3000tpa. The team aren't going to build another P1, so scale that deficit up by 8x, because P2 will be 8x bigger than that.
That's a deficit of $152m in operating costs over exporting the bulk ore somewhere else. Does that seem like a good idea to you?
Simply put, it comes down to this:
The value of L-Max lies in the synergies of being able to sell the by-products profitably, which boosts the overall margin of producing the lithium. As a pure lithium production process, it is is still competitive, but deploying it anywhere you feel like won't extract the full value. You need to carefully select the location to get the maximum benefit.
I know it seems to make sense to not ship bulk ore somewhere else to be refined, but you have to think about the by-products and the different costs of shipping.
Shipping the bulk ore from Australia to Canada might cost you say $120/t of concentrate. It takes ~9t of ore to make 1t of LC, so that $120 has become about $1080/t if all of the cost were pushed to the LC. It can be split amongst the byproducts as well, but for simplicity, let's just assign all of the cost to the LC.
Your products are sitting on a train line in North America and can be sent along, relatively cheaply, to wherever the manufacturers are.
If you build the refinery in Australia, you save that $1080/t at the front end, but then you've got to get both the LC and the amorphous silica to the manufacturers, which is probably going to be China. It will cost you easily $1000/t for both the LC and the amorphous silica to ship them, as they're now finished goods and need to be neatly packaged into containers rather than dumped into the hold of a ship.
So you've saved $1080/t on the LC, and immediately had to give it back in shipping the finished goods, plus you've incurred more cost on your main by-product. Remembering the work was all done based on sodium silicate, and that the sodium silicate price is about $600/t, and you've lost $400/t on the main by-product and not saved yourself anything on the LC.
At the end of the day, it is cheaper to ship bulk ore the longest distance as bulk cargo, dumped in the hold of a ship, is far cheaper than packages in containers.
Now, maybe the numbers have shifted a bit with amorphous silica vs sodium silicate, but I'll come back to that point in a bit.
6) It might be possible to punch out pre-fab L-Max plants, but I don't know why you would. Please see above points about getting the maximum benefit out of carefully selecting locations.
It would be far easier to punch out pre-fab Outotec cPlants and plop them down at the mine sites you're interested in, load up the concentrate onto a ship and send it to your carefully-selected location of a refinery, as outlined above.
My money is on that is what will be repeated if the one at Alvarroes is a success:
http://www.lepidico.com/wp-content/...Enhanced-development-option-for-Alvarroes.pdf
7) The licence might be available from 2020, though the little corporal seems to be playing games by trying to cling onto it. They have apparently added an L-Max circuit into their Si-Leach plant. If they manage to build that, I assume they would get to keep the licence. Whether or not the corporal can get that done is an entirely different conversation.
Regardless of if they do or don't, LPD aren't interested in WA for the reasons I've outlined above, reiterated by the December 2017 quarterly and by this email from Joe I got last year when I asked this very question. There's an important quote that I've highlighted as well:
Again, nobody wants to build one in WA.
8) No, shipping tailings to Canada is like shipping tailings to Canada. It's more expensive than shipping rocks from Portugal to Canada, or shipping from Australia to Asia, but it is still likely to be economically viable.
Maybe in the future there will be other, more convenient sources for LPD's operations in North America, such as James Bay, Separation Rapids or some other player, but if it is economical to do it and the teams are keen to do it, then there's no reason Mt Cattlin can't be a feedsource.
You'll notice none of those operations are anywhere near mining, whereas Mt Cattlin has been operating for some time. That makes it the only option for proving the concept.
Which is the point of P1; proving the concept. If LPD can make money buying GXY's tailings and shipping them most of the way around the world, that's a pretty strong signal to the rest of the market, especially those nearby, that LPD will gladly take their tailings too, if they're compatible.
As a proof of concept, it will never be the optimal arrangement. That comes later, once you've demonstrated the concept works.
Further down the track I imagine the team would look at Mt Cattlin feeding a plant in Asia, but for now, it makes sense to ship to Canada.
9) No, as pointed out above.
GXY's strategic investment is about opening up another source of revenue and improving lithium recovery from a mine that has mica contamination. As I've pointed out, there is no appetite or interest from LPD in building an L-Max refinery in WA, and they have done the work to demonstrate why.
Now, maybe the S-Max changes the numbers a bit, as you're talking about less than half the tonnage of the main by-product being produced, and maybe the value of that by-product is higher, which would be more forgiving to higher shipping costs, but I still don't see it being better. It is still going to be more expensive on a $/t basis, and that is why I don't think it will ever make sense to have a full-scale L-Max located in or around Esperance.
And to further make my point, I will now respond in kind.
What is Mt Cattlin currently producing?
Where is it shipped?
What happens to it when it gets there?
Are GXY making money from this arrangement?
If so, then why can't it be replicated with a concentrate of their Mt Cattlin's tailings?
Would they benefit from such a replicated arrangement?
Therefore, has their investment been impaired?
(20min delay)