Running Commentary on the SP Movements., page-11538

I tend to agree with most of your points but thought well lets look at the argument anyway.

If you look at PLS it has a payback period of, I think, 3 years on its capex and that includes building its own transport infrastructure for a 2 mtpa operation. Given scale and size the NPV here will be very large as @8horse has stipulated, and even just comparing to PLS you get that view anyway, which makes sense when his modelling is based on some capex will be funded by others and economies of scale give you cost advantages. Transport costs can also be reduced through AVZ exporting carbonate and costs can be further reduced through the credits that tin/tantulum offer here.

Given the large NPV what we are really talking about is sizeable economic rents and that means you can get alternate bidders. Even if the Chinese threaten to not build some infrastructure resulting in AVZ requiring to fund say an extra $500 million in capex I dare say the project at 5 mtpa and 10 mtpa will still give outstanding NPVs in any event. The issue though for us is our best takeover price will be from Chinese suitors IMO because of the higher NPV generated through someone else funding your infrastructure (or the situation where we have a Chinese partner in a JV arrangement where AVZ is also party to the mining operation).

If it was a European buyer then the NPV will be lower if (but from a very large number by the way) for example the Chinese then said well build your own transport infrastructure (being the infrastructure that will serve only AVZ because a lot of the infrastructure been built by the Chinese serves a lot of projects not just AVZ btw). But then again European/American buyers may still be willing to pay a decent TO price in any event (or enter into a JV arrangement with AVZ to mine it) because the issue is not AVZ here, the issue is the Chinese monopolising the EV benefits through owning lithium deposits. The Europeans/Americans IMO will be thinking if this went to JORC that those who control the lithium deposits (and especially hard rock deposits that provide for the important hydroxide market) will monopolise all the profits from mining, through to making carbonate and hydroxide through to making batteries and EV vehicles. This has been the Chinese strategy here from day one IMO when Hauyou enterred the fray. All IMO

In terms of TO and potential suitors, well I have given my view in this post:
Post #: 30212042
Post #: 30108800

Because I presume this will now get to JORC, I expect a Consortium bid by the way and most likely a Chinese Consortium but I wouldn't be surprised if non Chinese players are now starting to think about things (with or without a Chinese entity as part of their interest). The resource size here is too large and stakes too high (assuming AVZ becomes the resource we think here it will become in a JORC framework -Post #: 30119771) for say the Europeans and Americans to watch the Chinese monopolise hard rock mines (or monopoloise offtakes from hard rock mines which is what is happening in the Pilbara) and then by doing so monopolise the downstream markets for lithium and the various production products thereof.

If the TO happened pre JORC I would expect only Chinese interest because Europeans and Americans generally bid on companies where JORC or mining operations have been established - a generalisation by me. What we are seeing here is the likleihood of a JORC been established and that opens up your potential suitors IMO. But my money still is on a full Chinese TO, or a Chinese JV with AVZ to take this to mining

All IMO