I feel this will apply to PLS soon.
From HC KDR:
anatol4,366 Posts. 907 09/05/19 02:39 Post #: 38478321I am not a KDR shareholder but I will voice my opinion about this offer as I have already invested in another great Australian hard rock resource emerging atm. For putting a value on Earl Grey deposit we can use the latest transaction between Mineral Resources and Albemarle for Wodgina resource. We also need to look at a few strategic things in the market. First of all I think KDR management is not doing a good job in market analysis. They didn't do it in the past when they sold 50% of the Earl Grey to SQM, they sold it too cheap, and now they are selling the other half cheap again to WES IMO. I think WES should pay at least $1,084,000,000 for the resource, which gives a 40% increase in the latest bid of $1.90 per share. And it is being $2.66 per share. We need to go with the contained Li2O in deposit.Earl Grey deposit had 128mt at 1.44% Li2O when they sold it to SQM on July 2017 (instead of 189mt at 1.50% Li2O of today). SQM paid $162 per tonne of Li2O The amount of contained Li2O was 1,843,000t vs 2,835,000t today. (1,843,000 / 2 = 921,500t and $150m / 921,500t = $162/t)Now Wesfarmers happy to pay $547 per tonne of Li2O. 189mt @1.50% Li2O, contained (Li2O of 2,835,000t 2,835,000t /2 = 1,417,500t, $775m / 1,417,500t = $547/tAlbemarle paid $765 per tonne of Li2O to Mineral resources for 50% of Wodgina resource in Dec. 2018.Albemarle paid $1,159,000 to MIN for 1,515,000 tonnes of contained Li2O.259mt @ 1.17% Li2O, contained Li2O of 3,030,000t3,030,000t / 2 = 1,515,000t, $1,159,000 / 1,515,000t = $765/tAs this transaction is a recent one, we can can get it as a benchmark. We can also assume that a resource with 1.5% Li2O is much higher grade than a resource of 1.17% Li2O. Therefore it might have a higher value. Then KDR's 50% Earl Grey share with 1,415,500 contained Li2O makes;1,417,500t x $765/t = $1,084,000,000The $1,084,000,000 value of resource gives a 40% increase in the latest bid of $1.90 per share. And it is being $2.66 per share. This is my calculation, let me know if I am wrong. I think KDR can expect to receive higher bids from major lithium companies like Livent (Ex-FMC, the lithium brine producer) if it can be more patient. KDR's resource is very valuable IMO. Because all of the lithium majors are after the hard rock spodumene based lithium resource atm, the share of KDR fro Earl Grey resource will eventually find its value. There is no other large size resource in the stable part of the world. Here is the tables I have made when researching my spodumene based hard rock Lithium stocks in the world. (Liontown's Kathleen Valley and Buldania resources are just my estimation, so don't consider them as definit resources). And it's bubble chart;We can see that there is a big gap between the small size resources and the large ones. What makes Australian hard rock resources so important. It is because Australia has the best minable HARD ROCK SPODUMENE RESOURCES.High power batteries need to be made by Lithium Hydroxide.Producing Lithium Hydroxide from spodumene based resource is much cheaper than Lithium Bribe resource. (while there are other disadvantages of Lithium brine production). Despite producing Lithium Carbonate from Lithium Brine is cheaper than producing Lithium Carbonate from hard rock spodumene.Here is the table explaining all cost issues. I know a lot of people are aware of all these issues but in my opinion, the 10%-20% lower production cost difference of producing Lithium Hydroxide from spodumene based hard rock resources make those type of deposits very strategic. (there is other disadvantages if lithium brine, it also relays on the suitable weather)As you can see from the table above, there aren't many spodumene based resources in the world. Not even any available to buy out over 50mt without paying a high premium over to a previous purchase as a benchmark. That is what I am focusing on atm. And that is what makes KDR's Earl grey deposit very valuable. The world hard rock resources are all shared by big 4. Here is a graphic explains it well. This graphic includes both hard rock and brine resources. But it explains how the lithium market is monopolised. There is another interesting point in this graphics if you analyse it;SQM, Albemarle and Tianqi hold hard rock resources; SQM has 50% of Kidman's Earl Grey deposit in Australia.Albemarle (49%) and Tianqi (51%) partners of GreenbushesThe key point is;FMC (now Livent) which is the world leader in lithium production, does not have any hard rock lithium resource in Australia.And the CEO of Livent said (on the news of Financial Times on March 27 2019) that they were looking at low cost high quality assets in Argentina and Australia. "We are looking now. We're talking to people now," said Mr Graves.. "A good resource is all we care about""Mr Graves said it was looking to acquire another lithium brine resource in Argentina and also wanted to have a lithium mine in Australia, where the chemical is extracted from hard rock""We will acquire a hard rock resource if we can. It's got to be a high quality resource, a long life resource"It would be also very nice to see SQM and Livent as partners in Australia. This suits KDR's resource very much. I even have hopes that Livent would like to buy the stock I am holding. Who knows!. But KDR is the first one for Livent or big majors to look at. It's an advanced stage project. Good luck to KDR holder's.All my post are only in my opinion & for discussion purposes. Please DYOR.KDR Price at posting: $1.95 Sentiment: NoneDisclosure: Not Held
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