Overly optomistic forecasts in annual report, page-33

IMHO the OP has asked a reasonable question that we all should revisit over time.

Company forward LOM numbers are from those generated by independent experts in the DFSs for both the 2MT/a mine and the 5MT/a cases.

So let's look at those numbers and do a comparison. Firstly the 2MT/a DFS from September 2016. Remember all the company can 'project' are the figures from the 'independent experts', so a LOM figure of $US537/t was used.

Those same 'experts' back in 2016 were predicting an average price for 6% spodumene of $US534/t for calendar 2018. They have clearly underestimated demand, or overestimated the time to ramp up supply, or a bit of both. MIN and GXY both reporting sales of over $US900/t for 6% spodumene this year.

Basically the expert analysts over the last few years have been wrong in their predictions of spodumene pricing as the market growth/demand keeps accelerating. IMHO this is where there is opportunity for investors, when we can clearly see the 'expert analysts' are incorrect.

Those that rode the Iron Ore boom over a decade ago and invested in the likes of FMG, AGO and MGX at very low prices were also basing their investments on the 'expert analysts' being wrong. Many made fortunes because of it.

One aspect of our (PLS) forward estimates that I'm very sceptical of is the price of Tantalum. PLS alone will be increasing the world supply by about 28% when we have the 5MT/a operation up and running. When you add other mines like Greenbushes, and TAW also adding to world supply, the odds of current prices falling a lot are high. The demand growth for Tantalum is nowhere near the Lithium demand growth.

Overall those of us that have held PLS for a long time have been correct in assuming the very conservative 'expert analysts' were going to be wrong in their forward pricing. I can see no reason to change that view with the growth rates of EVs being above forecasts, the take up of large Li-ion batteries happening (not predicted by 'analysts' 2 years ago), and average size of EV batteries being larger than predicted.

As we go forward, yes I think our cost price (after Ta credits) will be higher than forecast, but so will the price we receive for our high grade spodumene concentrate.

That initial shipment of 6.2% low iron spodumene concentrate really was an announcement that PLS has arrived as a force in the lithium world. You don't get low prices for high grade product!!