It was clear that the only downside of this company is:
1. Calculation for the construction plant
If they somehow got the calculation wrong for the plant, so far my biggest concern for this company, whether the same thing would happen like Activox, they halt the decision to build commercial plant because construction metal rise and lose approx. 200mil to find a way to build it effectively quoted from
"
http://www.nornik.ru/_upload/editor_files/file2020.pdf "
ctrl+f/find the word " Impairment of PPE and intangible assets of $278 million was mainly driven by revaluation of assets in Botswana and Australia "
and many more so you could find just by simply googling activox halt or anything regarding building activox commercial plant
2. Capital to build it
They need a lump sum money to build the Commercial plant but lack capital to do so, but it was clear they are having a hard time to get one (no soph investor interested, last CR was from retail SPP), shown in top20 lack of interest
While they are lacking a lump sum money, if all my calculation correct, they would have the Cash flow goes in because:
Sileach and L-max issues:
It was clear that they are using the same the same strategy but an adjusted technique in the middle
This is L-max plant that you can find from their website:
while sileach from the lithium australia presentation:
View attachment 336683
and if you follow through all lithium australia presentation, you will see how the development of their sileach process:
First you go through their presentation one by one:
Aug 2015 presentation:
It was clear that it is still l-max
Nov presentation:
They started to change the headline Acid+lithium "silicate" or silicon (chemical symbol si) and if you keep going through you will see the future expectation they will leverage to lithium clay resource AND if you look back to aug presentation, you will see Proprietary technology licences issued while now it is procured ( high chance they are developing silicate leach process around aug but just found their confidence in Nov)
Jan presentation:
now it becomes lithium mica+clay, shows their confidence with clays is working while future expectation is now AFTER they are able to get LiOH (lithium hydroxide) 99.9%. Now their additional credit becomes:
silicon chemical
aluminium chemical
rubidium and cesium while previously non stated.
Feb presentation:
now they are able to treat spodumene, tourmaline, petalite and jaderite.
and if you go through lepidico website you will see they stop giving out LIT australia presentation after Feb, it is shown they had conflict in the middle
and if you go through PLP presentation regarding L-max you will see that PLP is Lodging patent for Rubidium and cesium extraction from L-max, it is shown they are having conflict regarding this matters,
sep 2016 presentation: Additional patents submitted relating to processing of Lithium-Phosphate Minerals (eg. amblygonite and montebrasite) and production of Caesium-Rubidium formate from micas
HOWEVER, Lit might still get their patent regardless as it is still possible to claim those small part of process but it is by no means a bad thing, we will still get a cash flow from them (royalty 2%) as they are working with PLS and expectation date to start producing from PLS is around 2017-2018 , if all goes well, we might not need any CR unless we are building something big, which is the commercial plant.
If they failed to get the patent however, we are in an even stronger position as we now able to treat spodumene and all other lithium silicate while still having cash flow coming from LIT Australia
with the growing price of lithium and forecasted 2019-2020 at 10k/tonne while being able to economically produce at 8k/tonne we are in a strong position and if the lithium demand surges, oil demand will go down and potash player will have a hard time considering potash player usually lease some of their part for oil player, weak player will kicked out and potash prices will eventually goes up
http://www.fool.ca/2016/05/06/why-t...s-for-potash-corporation-of-saskatchewan-inc/
All in all, more than happy to secure my position here and this post is not an investment advise, DYOR as there might be a flaw in my calculation which i might missed out
(20min delay)