Maybe I am just repeating myself, so here goes. Obviously the...

Maybe I am just repeating myself, so here goes. Obviously the company itself is in the best position to answer such questions, and the answer will not be attained on HC is my point. So below is my view, and obviously everything below is IMO IMO IMO:

1. Timelines/approval processes and pit floor drilling - dealt with in Post #: 49216956 From this embedded post, this comment, noting my view IMO IMO IMO that things are done concurrently and not sequentially, albeit some things need to be done before can move on like IMO without Offtakes/funding FID won't happen, when it comes to resource developments- some relevant extracts in that post:

"As 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."

And

"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)."


And

"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."

2. On demand, which drives when you can enter the market - refer Post #: 47799612 Within the post is some information around demand, but this table sums up what 3 THh in 2030 means for new supply, with more info in that post IMO IMO - it is ultimately about demand, and if 3 TWh come in well read a number of new greenfields developments required, a hell of lot more required - and obviously how demand grows this side of 2025, noting you sign Offtakes and secure funding before your typical 18 month to two year construction period, is also the key for AVZ IMO IMO:



3. Funding and payback periods - Post #: 49202201 - further info in this post but some extracts below provided IMO IMO:

"Just to illustrate, if DFS variables come in and AVZ gets 75% of that it will get US$152 million per year in nominal profit (i.e. cash flow). Compare that to finance. Noting that the DFS itself did not include the SEZ or remittance of VAT. Also we are not even delving into expandability and economies of scale. Seriously does that poster think this outcome would already be fully priced into the current SP LOL. Obviously this is the difference between a confusion of assessing finance against NPV and actual nominal cash flows, because interest payments and principal is paid from cash flow btw"

And also IMO IMO too many confuse NPV with nominal cash flow, as debt is paid from nominal cash flow, as well as where capex is in NPV calcs with a lot more info in this post - Post #: 49062547 with an extract below:

"Also some people confuse NPV and nominal capex - capex is a part of NPV itself so it has been accounted for in project feasibility where NPV and IRR is determined. Also NPV is discounted cash flow. In production you move to nominal based metrics is my point. According to the DFS, and the fact I aimed to replicate it , Post #: 44177152, I got essentially very very close to the DFS IRR and NPV values. So, if variables come in as assumed nominal cash flow (i.e. profit in nominal terms so don't confuse NPV as teh way you pay of noominal debt) is some US$203 million per year in production - 75% of that is US$152 million to AVZ, making payback period 3 - 5 years depending on how much funds are borrowed by AVZ and the assumption here is AVZ pays for all the capex. Point: Don't confuse NPV with nominal profits. This assumption and therefore modeling also needs to be read in context that the DFS did not have SEZ benefits nor refund of VAT, which would be a quid pro quo for AVZ picking up full capex, if that is what it is meaning a higher free cash flow btw if modeled in the DFS itself. Also note the NPV been quoted by some on here is also in US$."


4. Will AVZ be a tin miner before a lithium miner and need for demand with relevant exrracts - Post #: 48705846: Again extract below IMO IMO IMO:

"I am going to say it again - you need demand to get Offtakes and funding. Currently there is a supply overhang. It is the road to 2000 GWH (or 3000 GWh) that will determine entry to market for new greenfields projects. And before we even think greenfields projects, you still have those C&M (or reduced production) brownfields projects to get back on line to full production capacity.

My problem with Nigel is that he hasn't updated markets around timing to market and reasons why he thinks that timing will eventuate, because at the end of the day it is about demand. Only demand gets you into mining. You don't invest in a project if you haven't got Offtakes/finance, or committed buyers, as a greenfields project (particularly a explorer seeking to become a miner), and if people think they should be then IMO IMO IMO this side of the market isn't for them. My comments are relevant to all greenfields projects, where the 'proposed producer' is an explorer seeking to become a miner."

And

"As for tin, my view has been tin alone won't get this to mining to extract value - might provide some good revenue in the interim whilst waiting for lithium demand to show its head through the talk, but economics is about lithium production. My views on tin mining (not artisinal mining) are here - Post #: 45170120 and Post #: 43553026 (this latter post talks about tin cut off grades for stand alone operations (not artisinal)"

5. Game of cat and mouse around when to sign and pull the trigger IMO IMO IMO: Post #: 49315456, again extract below:

"It is a game of cat and mouse in other words, but as I have stated here in the past if AVZ wants to be in market by 2022/23 it needs its Offtakes/funding/finance and FID done and dusted by quarter 2 2021 which I posted about here - Post #: 49216956. So AVZ still has a little more time to extract the best deal available, so time will tell what dea lis ultimately extracted. All greenfields projects seeking to enter market with large resources face the same problem of balancing price with entry, albeit as I stated in the past price will be minked to an index (so the question is what is the % link to that index). To illustrate LNG, and as a simple example, you see contracts ranging with prices of say 11% - 14% of the oil price per mmbtu of LNG sold, so whether you get 11% or 14% depends on bargaining strength, will to enter market, and demand/supply conditions forecasted during those contract negotiations etc etc. The demand forecasts are in the first embedded post above."

6. CIF versus FOB pricing
There seems to be quite a bit of confusion on this issue IMO IMO. In a general sense using Australian data, the cost of freight for netting from CIF back to FOB is about US$20 per tonne - US$30 per tonne for spodumene exported. In its DFS, AVZ is showing the difference between CIF and FOB of US$25.30 in Table 7 per tonne.

In effect, if you are paid FOB, you simply net this freight cost of the CIF price to get back to FOB in contractual clauses. The only benefit in FOB pricing is it reduces freight risk to the seller if the cost of shipping in contracts is actually a fixed price (say US$20 per tonne), meaning the seller is shielded from freight costs that increase were for example it to take longer (or take longer to unload at end port) to get to end destination (meaning you are risk free of demurrage costs at end port destination should they arise). But most 'mineral sales' contracts IMO IMO just use actual shipping costs to get back from CIF to FOB, meaning shipping risk is with the seller (not buyer) in most cases. It will be interesting what the sea freight cost is for AVZ, but as seller of product simply deduct sea freight cost from CIF to get back to FOB to AVZ. As a general rule, even if selling on a FOB basis you still seek to align the bringing of product to the port with the buyers shipping schedule etc etc, and the miner probably has more discussions with the shippers given they need to ensure product is available for shipping btw etc etc

A key point: The seller, in this case AVZ, is obligated to provide a quality product, and generally speaking contractual clauses often would have testing at either the port of loading or port of unloading, before final payment is made, so that obligation does not shift whether you sell product on a FOB or CIF basis IMO IMO. Be mindful most buyers of spodumene (or most minerals where shipping quantities are not large - i.e. we are not talking iron ore here for example) do not own the ships the spodumene is exported on is my point, and the ships are often also not owned by the seller - i.e. they are third party vessels.

The only benefit of selling FOB from a sellers perspective IMO IMO is if something goes wrong on the vessel - which is rare in itself. Selling on a FOB basis means title transfers over ships rail to the buyer at port of loading but it doesn't mean actual shipping costs will not be deducted from te CIF price to get back to FOB, but still what the seller gets paid is on the quality of the product. Note that the seller is still often responsible for loading the product on the vessel itself. CIF pricing means the buyer doesn't take title to the product until over ships rail at end destination, meaning seller is responsible for unloading, hence why sellers prefer to sell, in part IMO IMO, on a FOB basis as they are not there for the unloading and need to rely on others. But what you get paid is still based on the product meeting contractual specifications, and that is tested by testing the product itself at either end destination or at loading facility, and either approach is used whether selling on a CIF or FOB basis, and testing is done by both buyer and seller (or independently) btw.

All IMO IMO, but to reiterate demand dictates not what is posted on HC etc etc The embedded posts above have a lot more information without going over old ground as well, but timelines ultimately depend on a supply gap emerging. And they are written IMO, because ultimately noone on HC can answer timeline questions, given they will be tied to Offtakes and funding, and only AVZ can provide that guidance, but do it in a way that doesn't breach 'continuous disclosure rules' etc etc, hence why Anns are the proper information sources, albeit I think AVZ should stop using the term imminent. Ultimately how imminent things are are based on your interpretation of when demand>supply that opens up a new greenfields development to come to market, and then work back 18 months to two years on when construction needs to commence. And before construction you need to have your Offtakes/Funding/approvals/FID all done and dusted.

Anyway, the above is my views IMO IMO, and obviously done over a VB now. Anyway, enjy the rest of Sunday - market/demand always dictates entry to market. The word imminent IMO needs to be dropped from AVZ's vocabularly and ultimately the ket dat too me is a need for construction to start 3rd quarter if AVZ are seeking a 2022/23 production start date, meaning everything else needs to be done by ends June 2021. Timeline is getting tight is my point, but as I stated previously demand is the driver and conservatively I have indicated on here a 2023/24 production start date. So for me, 2022/23 will be a pleasant surprise is my point, but to repeat only AVZ can answer timeline questions, but IMO in teh past AVZ has also been guilty IMO of over-zealous timelines. As a result, it neeeds to hit the 2022/23 production date and/or if delayed should IMO clean the record before end 1st quarter 2021 if a 2022/23 start date is of the agenda etc etc.

To repeat, the answers one seeks won't be found in hotcopper or the bottom of a now empty VB longneck. Hope all enjoy the rest of the day.

All IMO IMO