Last night in response to going on in another thread I posted my general views on GPP's potential - I followed that up with two other posts this morning on that thread. Others can decide what they see as GPP's potential. Whilst I have looked at the projects seperately, IMO there is likley to be some synergies between the projects but tyranny of distance between the 3 hasn't crystallised in my head how those synergies could operate. Probably the CTL project most likley project to get up first - assuming all 3 viable - and I see that project then funding(some of) the needs of the other 2 (albeit for one project - project 3 - I do suspect they will also look at JV arrangements IMO. So
@ammie happy to start a new thread about potential. If anyone has a contrary view please share but please provide some basis to those views please. I'll integrate the three posts into this one reply.
Project 1
For anyone wanting to understand the CTL project this summary article says it all in an economic sense - note the difference between sales price and production costs if get this technology up and working. No wonder why the company is excited - if the process works can result in huge profits if production does come to fruition.
http://www.farmingahead.com.au/cropping/ctl-fertiliser-trials-a-success/
Project 2
Regarding the latest Ann on the brine project in the NT be mindful lithium producers get around $400 per tonee to $800 per tonne for lithium concentrate. They do not produce lithioum carbonate - certainly the existing and proposed Australian lithium projects (and others I have looked at - RMX) intend to/produce concentrate . Conversion from concentarte to carbonate/hydroxide/oxide is done by processors overseas and no surprise why they get paid a lot for their processed lithium going into the battery process for example. Brine generally gets US$500 a tonne or lower whilst hardrock gets better prices because it has less impurities than brine. You also roughly need 6 tonnes of lithium concentrate to every tonne of lithium carbonate, so concentrate producers still do well (i.e. if you get US$500 per tonne for lithium concentrate and lithium carbonate is worth say US9,000 per tonne, you are ineffect getting 1/3rd of that carbonate price as the supplier of the concentrate.) Note: Lithium hydroxide (which can only be produced from hard rock has a higher price than carbonate since it has a higher lithium content and produces better batteries than carbonate).
So if selling potash at US$250 per tonne still doing ok when compared to the price you might get if producing lithum from brine. This is assuming the NT project can become good. I probably am been very conservative with price because it could be as high asover US$600 per tonne depending what is actually proposed to be done, but right now I am not clear in my head who will derive the benefits fully (probably because my understanding of potash from brine is very rusty) - who will do more processing from the Ann itself. If GPP will get a higher price then its cost base will also be higher - see Karinga scoping study for example and the price they are assuming is over US$500 per tonne As an aside, for anyone interested in SOP, the attached study for a seperate project from a separate company comes from a proposed SOP project in the same vicinity as GPPs new tenements - the NT so anyone intereste din project 2 should have a read of that study IMO.
http://www.rumjungleresources.com.au/projects/karinga-lakes-potash-project-nt
Karinga Lakes Project Scoping Study please click
HERE
I have seen too many posters on other threads and some DR on this thread blabber on as if lithium miners produce lithium carbonate (i.e. brine or hardrock) and many don't get that hard rock can produce the more imporatnt lithium hydroxide.. So for the record I just thought I would attach the GXY price and clearly it shows that they expect receive US$600 per tonne for lithium concentrate (produced fromn hardrock). It is sold to someone else to convert it to carbonate/hydoxide .
http://www.*.com.a...ond-lithium-offtake-for-mt-cattlin-69767.html
If don't believe DYOR. I previously posted on the difference between hardrock and brine previously. If interested see below - there were 4 posts before this as well but I just reposted the last one:
Post #: 20908046
Project 3
Regarding Morabasi, if it has what it could have, given it is hardrock and possibly contains other very imporatnt tarce metals - Niobium, then its purity would probably be used by the buyer of the concentrate (i.e. yes I expect Morabisi to be producing concentrate if the project is a goer) to produce lithium hydroxide as against lithium carbonate, so as a concentrate GPP would get the top end values IMO. That is over US$600 per tonne concentrate to GPP. Byproducts such as niobium if recoverable would become highly valuable and can drive project economics - no different to how cobalt in nickel project, and condensate in LNG projects can bring those projects to fruition because they bring in extra revenue at little additional mine development cost.
The delay in sampling results from this Projecty 3 is problematic but understandable if it is true that they cannot move the samples out of the country and sample testing has been slow. The fact the company has raised moneis and put crews on the ground suggests too me they are happy with what they have seen so far. Finally don't confuse diamond drilling with other types of drilling either. I suspect they will do some air pressure depth drilling as part of phase 1 field work (maybe a hole or 3 at most and results would come in fairly quickly if they did such drilling - three weeks from drill for each hole) and air pressure drilling costs significantly less than diamond drilling. (
@ans25 posted a link to such costs a few weeks back from recollection too). Phase 1 will be about working out the best place to put a diamond drill in in future IMO (i.e. field work, random testing etc).
Summary and risk
So GPP have three projects that can bring significant value to the company. Any one of these projects coming to fruition will see the SP rise significantly IMO . Doing my research I think the best chance is 1 followed by 3 above, with 2 an outside shot. Project 1 is more likley to be the one that can bring the quickest revenue if it is a goer. If the samples for project 3 come in and are very good, I would rank 1 and 3 equally. Project 2, if developed would take the longest to develop to first production assuming all three are goers, but right now my confidence is in 1 followed by 3.
But far more work is required on each project before one can consider a development of any type for any of them (to some posters you don't become a producer overnight without doing your studies, testing and development and IMO I would not be surprsied if one of the abovementioned projects were to gets up it is not done by way of a JV (that is GPP getting a partner to stump up the development capital were the project proven to be viable - certainly I see that playing out for project 3). The drift in the SP too me simply reflects those wanting quick short term gains versus those here for the long term (always causes angst IMO when SP drifts down). If there is a next spike in the SP following the next announcement suggest you try to free carry or at least derisk your holding by selling some - just an opinion.
(20min delay)