Project CAPEX and Working Capital Comparisons, page-2

Hi Wombat

Impressive peer analysis there.. Whilst it could be argued that the higher IRR is a 'function' of the low CAPEX, there is a absolutely no argument as to the capital intensity...

I keep coming back to the fact that ADN will be the most likely to make 'binding offtake', 'revenue' and most importantly 'profit', sooner than these peers ... (I have a few shares in LTR )

Furthermore, they are the most likely to have value 'realisation' as soon as binding offtakes are signed because Capex is so low..

Broadly speaking, Li miners are perhaps a good 'test case' for 'opaque' market commodities, like wet/dry processed Kaolin and/or HPA

Off take agreements were often signed early, debt funding was secured, big capital injected but look what happened in terms of price realisation.. many of these projects have very little headroom, so price reverts back to effectively PFS level on just about every Li project and guess what, AISC is pretty much line ball if not greater than the market price obtained for the first few years of production ( the planets may be starting to align for Li producers now )

Im not suggesting that this would automatically happen in HPA / Kaolin but what I would say is that they who have the lowest cost structure locked away, will offer the best return to shareholders especially in the shorter timeframe and may even be able to find expansion from cash ..

Thanks again Wombat for taking the time to paint the picture

Ezi