A carefully considered thread title I mean you wouldn't call...

A carefully considered thread title

I mean you wouldn't call them liabilities would you? ... so they are assets and appear as such on PLL's balance sheet.





Amazingly PLL is (somehow) responsible for SYA current SP swoon. Apparently PLL referring to SYQ and Abitibi as one of their "Assets" is "damaging" to SYA and causes bad "optics". Apparently a "strategic partnership" is the wrong thing to say. Certainly PLL guaranteeing that the mine had clarity of cashflow back when spodumene was selling for ~$600/t by agreeing to OTA was sooooh bad.

From the SIIC interview ... quoting KP

"Essentially so in Quebec we acquired an interest in Sayona mining and their Authier lithium project. A 25% interest in the project and 19.9% in the company a year and a half ago yeah January 2021. We jointly acquired North American Lithium out of receivership this is North American lithium right here uh so we own 25 percent of the combined Abitibi hub & Tansim (an expiration property).

Combined this is by far Canada's biggest spodumene project. It's by far Canada's best located project. It's on rail near the town of Val D’Orr – a real mining town of 30,000 people, trades, spare parts etc. Every other Canadian lithium project is remotely located. Here are the other Quebec projects. They're wonderful ore bodies but they're considerably north of rail access and there are no significant communities here. They have to fly and fly out the workers. We won't have to do that here so we think those are big advantages. This isalso by far Canada's most advanced lithium project in that it is already built. This was built 7, 8 or 9 years ago by Lukas Lundin's team (Lundin Mining Corp).It was built probably 8 or 10 years too early - before you know Tesla hadn't sold a car & no one else was making electric cars. They struggled, went into receivership and the Chinese bought it. They started it up in 2017-18. I was there in early 2018 when it was ramping up and they were making good progress. The team identified $30M of capital they wanted to spend to debottleneck and improve throughput. The Chinese wouldn't fund that because lithium prices then were falling and they put it back into on a care maintenance for the last 3 years. We bought it out of receivership we think we can start this up in the next 12 months.

The last thing I'll mention is we have an offtake agreement on these assets for the greater of 50% of production or 113,000 tons a year of concentrate with “at market” prices subject to a floor of $500 and a ceiling of $900 Prices are now $5,000 higher than that. If you do the math, if we were to be selling today 113,000 tons with a $5,000 margin, we'd make over 500 million dollars of EBITDA just on our offtake agreement. A spectacular project asset near term we're very excited about it."

Can KP be any more complimentary? He also commented on the future LiOH from PLL's Quebec assets also "...lithium hydroxide production in Quebec which we intend to be a big part of in Quebec" - Looks like PLL will be a part of picture for a long time (hardly a divorce forthcoming). Wonder what compensation PLL will collect for agreeing to "cease" the offtake in favor of a JV for LiOH production.There's even been a suggestion of "gloating" by KP. I can only surmise it is this (from the SEC AGM Transcript filing)



Gloating (?)... hardly. I can think of many ways to say the above that presents SYA in a negative light - but why do that? Its a strategic partnership. IMO if you run some numbers using various annual ASP for SC6 you will see the revenue (and corresponding EBITDA margin) impacts for SYQ. Then factor PLL gets 25% of that "profit" (assuming SYQ distributes a dividend to the partners) in addition to margin it makes on the OTA. Of course only paying 25% of Capex and Opex cost for 70% of SC6 production definitely makes it a very attractive asset.

Stu Crow must be grinning then. He gets 50% of Ewoyaa production for pretty much 0% of the Capex to build a 1.5Mtpa to 2Mtpa ROM operation. Are PLL shareholders upset with KP for this deal? Wonder if ALL.LSE shareholders get mad at KP for him referring to our Ghana assets?

It's business ... deals are made ... I'd be far more interested in what SYQ plans are for (rapidly) expanding concentrate production capacity (who cares about a 27 yr mine life). And if I'm practical I'd say BL & SYA have no incentive to do that (why pay 75% of the Capex). There's a win-win in there somewhere that we HC posters don't know anything about (yet).