PLL General Discussion, page-1194

And back to normal discussion ... seems like BMI now firmly in the market surplus camp for next 5 years ... until deficits return in 2030.
Here's the latest graph
https://www.reuters.com/graphics/LITHIUM-PRICE/egvbybklgpq/chart.png




The supply-demand tension is getting pulled in all directions. There is large amounts of new supply coming (in spodumene you only need to count SYQ-NAL, then SGML, LTR, LLL, PLL-ALL and PLS expansion - thats almost 2Mtpy of SC5.5 in just those projects) plus a heap of new brine/DLE/clay carbonate projects.

Nonetheless the 2 numbers that I pay most attention to (for PLL) are 725,000 and 180,000.


So reading the SYA Qtrly - nothing really new there, especially wrt to NAL. I'd call the stated IRR (after‐tax Internal Rate of Return) of 2,545% "disingenuous" as it ignores (as sunk costs) the capital invested for acquisition and improvements. They are not alone in this regard - other companies also do that. I don't find it all that helpful.

Now as I read and thought more about this particularly Qtrly at this particular time there is an inherent "pivot" towards the "Northern Hub" - and the Northern Hub is going to be Hydroxide. The commentary of "The Moblan Lithium Project is an increasingly strategic asset at the centre of the Company’s northernlithium hub" and "Major resource expansion for Moblan Lithium Project, with estimated Measured, Indicated and Inferred Resource of 51.4 Mt @ 1.31% Li 2O (sensitivity analysis at 0.55% Li2O cut‐off grade), representing one of the single largest lithium resources in North America."

That's my bolding but IMO its putting some definition in place. MLP is not this island in a large sea of claims owned by SYA. So I ponder what SYA really wants to be and what PLL sees with its ~14% ownership. I see 3 parts (actually 4 but I discard the 4th part which is everything non-Quebec).

Part - 1: A producing company - the JV with all of its combined assets, underpinned by NAL concentrator - owned 25% by PLL and 75% by SYA.
This piece is a bit of conundrum as it relates to ownership structure and assets. This can all be solved though (just saw an interesting structure coming out of Vulcan with their JV). I'll post more on that another time.

Part - 2: A development company - this is the Moblan and Moleon Lithium Project (M&MLP) - owned 60% by SYA and 40% (IQ - GoQ).
I see this as a natural spin out JV opportunity to quickly develop and build for the coming deficit years in 2029 and beyond (per BMI graph above). M&MLP looks remarkably similar in size to SGML (P1+P2). If you don't know SGML it is a Canadian company (also listed NYSE) developing the massive Grota do Cirilo project in Brazil. What's massive mean?
Overall consolidated MRE for SGML is 77Mt at 1.43% Li2O and 2,600KT of LCE
Overall annual SC5.5 production goes as high as 750-800 Ktpy from Y3 onwards
Looking just at P1+P2 the MRE is 42.5Mt at ~1.45% Li2O and SC5.5 production of 270Ktpy (Y1) + ~260Ktpy (Y2) for 530Ktpa Y2 ... enough for about 80Ktpy of LiOH (add in P3 and you have an ~100Ktpy LiOH capability ... and Brasil wants that in Brasil).

A 530Ktpa SC5.5 operation with SGML Opex (US$353/t) at SC5.5 price of $3,150 puts EBITDA at ~US$1.48B at EV/EBITDA of 5X, puts EV ~$7.5B - so that is with a huge set of assumptions AND that the capital has been invested and the concentrator has been constructed/commissioned and producing.

Comparing (at this stage) to what is the known MRE for M&MLP (at 0.5% c/o grade as that is consistent with SGML) 42.4Mt at 1.23%. Moblan has a PFS due in May'23 and DFS at year end. SYA is continuing with an aggressive drilling campaign so I hope it would get them close the the 77Mt that SGML has ... and an open pit operation like what SGML has ... and a target ~100Ktpy LiOH capability. Like most opportunities time is of the essence.

KEEP IN MIND revised NAL MRE Open Pit M&I only is 25MT at 1.23% Li2O (and the answer to why I only ever consider M&I and exclude Inferred from any valuation or comparison is evident in the DFS).

Even Albemarle has a (capital contributing) partner in developing the largest Lithium hardrock mine in the world. It's one thing to own equity in the holding company and an altogether different thing holding a project equity interest. I see the SYA doing some restructuring with IQ if this going to fast track into something big with an integrated mining/refining operation.

Part - 3: An exploration company for the Lac Albert and Troilus claims. This is "capital light" compared to development and production assets. But this also might just be in the DNA of SYA. Matter of focus.