Just a few more observations of talking with John Holmes and Ken Brinsden yesterday and sorry I didnt have much time to post last night
I only arrived at the conference at lunchtime and whilst walking into the main conference building I spotted NB and JY (now at Spitfire Resources) sitting with Ken and John Holmes at the same table. I know Neil well and said hello and Neil kindly introduced me to Ken and I said to Ken that I would catch up with him when he returned to the booth up a little while later. It was great to get an intro from Neil as I had not met Ken before. About 20 mins later there was hardly anyone around the PLS booth while the afternoon session was on so I had a really long chat with Ken and John Holmes- magic! Why would you be inside when you can get unfettered access to the company managers??
Just a few reflections on what I brought up with them
1. Financing which I have already discussed - patience is all we need. Result of the activities not yet known but it will come in time.
2. DSO This was one area where I noticed Ken was very careful about the words that he used to respond to me. Ruifu are still in the equation and keen to deal with us. Getting capital out of China is a real challenge for them and many other Chinese companies and it takes time. In case you are not aware Ruifu is building and commissioning a new Lithium Carbonate plant so in the not too distant future a reliable supply of input raw materials could be a real issue for them. Ken is also in discussion with other companies. I got the impression this option will require more time and more effort. we should all be aware this is not a long term sustainable product but a short term opportunity to obtain additional cash.
I asked where they would mine DSO from and the answer was most likely the main pit and not Lynas Find which has a slightly higher mica content but still very saleable. There are also some mine planning issues around where it makes most sense to mine any DSO and the outcome of that is from the central pit.
3. Good projects like Pilgangoora are attracting very good candidates and they have been able to recruit some very good people sometimes after they have approached the company themselves.
4. Ore size and grade update. This is only a few weeks away and is mainly targetting the increase in reserve as the actual resource size upgrade was done a few months ago. The reserve size is currently 70m tonnes and John hopes to get it to 80 - 85m tonnes with all the work they are doing. It is impossible to predict the upgrade size but it is not far off. Its worth considering 80m tonnes moned at 4m tonnes per annum gives a 20 year mine life!
5. Plant optimisation - when I raised the spectre of 6 and 8 mt tonnes pa Ken mentioned that they are in the very early stages of investigating ways to improve output through optimising the plant capability and they are investigating an additional process to allow that to occur. I doubt that we will hear much on that until the 2m tonne pa plant is commissioned. It is great to hear that they are already looking to squeeze more tonnage through the same plant at some time in the future and it would drive our unit production costs lower.
6. I also asked about the geological prospectivity of Mt Francisco (owned by Atlas Iron who want us to develop it) at which time John Holmes became very upbeat and described that from a geological view point the three big spodumene deposits in the Pilbara region which are: Pilgangoora, Wodgina (Mineral Resources) and Mt Francisco!!! Geo mapping is set to begin shortly and later on they will begin an exploration program. So in a nutshell we have two of the three biggest deposits in the Pilbara. I didnt ask them but I began to think well is 3oo to 350m tonnes possible?? If you cast your mind forward 5 to 10 years, the volume of lithium that will be required will be much much higher than at present and a 10m or 15m tonne pa plant(s) may well be required to meet the market demand.
If you have not listened to Ken's presentation from yesterday please do so as it reveals much about the opportunity PLS has in the years ahead.
Cheers W2
PS. I have never had a problem with approaching PLS management in the past and Ken and John are just great company for a chat about all things to do with exploration and mining. I was in mining fro about 10 years so I can speak their language which probably helps too. My thanks to them for sharing with me what they could yesterday.
(20min delay)