PFS What should we expect to see ?

There has been a lot of interest in the Lithium sector in 2016.

In 2017 it is very likely we are going to see 3 or 4 small cap exploration companies increase in value exponentially , and others maybe up to 20 of them fall by the wayside finding it hard to raise sufficient capital to become a profitable producer.

In assessing the chances of SYA it appears they are more advanced than many of the small explorers on the ASX as they are weeks away from a pre feasibility study ( PFS )

The challenge for SYA is they are only capped at $20m so in respect to their ability to raise cash to fund production they need the PFS to be good.

The market cap rewards good Lithium stories as we have seen with ORE ($867m market cap), Galaxy at $700m and Altura at a $200m market cap but we need to remember all of these were far lower market caps before their PFS.

My point and reason for posting the question on what we should expect so see to calculate whether the PFS is a good, great or actually a poor result ?.

I accept if it is a poor PFS , SYA is not a dead duck as they can do more drilling , and extend the current project .

They also have addition exploration ground in the Pilbara, at Mt Edon, and East Kimberley but for me in the short term the key asset that everyone has high hopes for , and seems to be the major reason the stock has had such high turnover was because of the Authier project potential and recent progress.

My concern is to question how detailed will the information we are likely to get in the PFS be , I know we are all waiting to see it , but will it provide us enough information to work out whether the market cap is to low or not

Will it for example show how much the plant set up will be.

Will it estimate how much production can be achieved per annum.

Will it then show what the annual cost of that production per tonne would be

and finally

Will we be able to estimate what sort of income generation on those numbers at the $600 to $900 per tonne would be ?

In looking at AJM they seem to have 18.47 [email protected]% LTI

SYA in the JORC seem to have 13.74 [email protected]% LTI .

AJM appear to have only published the type of information I am referring to in April 2016 in a full feasibility study rather than a PFS so on that basis what could we expect to see in the PFS ?

Below is the AJM details of April 2016


KEY FINDINGS OF FEASIBILITY STUDY (AJM)
 Annual Production of 215,000 tonnes (average) of spodumene concentrate (steady state)
 LOM Net Revenue of A$1,562 million
 LOM Cash Generation of A$773.8 million
 NPV of A$382 million and IRR of 59.5% (10% discount rate)
 Project payback of 1.7 years
 Maiden Ore Reserve Estimate of 18.47Mt @ 1.07% Li2O
 18.47 Mt of total ore feed to produce 2.744 Mt of spodumene concentrate production  LOM Strip Ratio of 2.7:1
 LOM Cash Cost (FOB) of A$298 per product tonne; Gross Margin of A$348 per tonne