Running discussion on SP, page-1319

For the record, I have also stated my concerns at been able to meet JORC end June - initial JORC. In this embedded post just the other day I state -Post #: 32459389:
"An emerging issue for me is around the number of drills as suspect it will be tight to hit end June initial JORC but expect a good JORC. Suspect they will be able to ramp up drilling to hit the required drills, since they need to drill 60 holes (at 330 metre depth average) to get to the initial 20,000 metres drilling. Then the next 20,0000 metres (given they intend doing 40,000 metres drilling in total) means double what I have said but the next stage will be post 30 June. So tight."

I recognise what you have done with trig etc and then using a width calc to get to metres cubed. So I went back to the basic I use on how resource is calculated to just test the result (i.e. I think your post is good btw), so recognise there will be some slight discrepancies from this point btw

The equation I use is:
width * depth * length (these three give cubic metres) * specific gravity (2.8) = ore reserve.
For this deposit at 1.5% Li20 need 5 tonnes of ore for 1 tonne 6% spodumene concentrate.
Once at spodumene concentrate need 7.0 to 8.0 tonnes of 6% spodumene to produce 1 tonne lithium carbonate.

So going back to your post I think I was okay getting to the 16.1 million cubic metres estimate in your post using your calcs (and high testing in a basic equation above as well) so multiplying that by 2.8 gets to an ore reserve of 45 million tonnes in that area (assuming all is recoverable noting some of the initial results at top of the strike are weathered from recollection hence why I used a 230 metre recovery target of spod (rest not recoverable)).

So using your numbers unadjusted, divide 45/5 gets you to 9 million tonnes of 6% grade spodumene. Divide this by 7.5 gets you to 1.2 million tonnes carbonate equivalent in total. Price of carbonate at $15,000 per tonne average gets you to close enough to your in ground nominal value, however, that is in nominal terms and in an NPV term ultimately it is how that translates to meeting hurdle rates of return over a production period. If they don't produce lithium carbonate say produce spodumene and using $700 a tonne gets you to an in ground value of $6 billion so what they produce is a key here, but also what they produce has costs (the missing ingredient in the calcs when moving to project viability). If you look at PLS, they didn't decide to proceed to mining until they had 125 million tonnes of ore in the measured and indicated category from recollection, so obviously more drilling required here (meaning finish the 20,000 metre program to get to a initial JORC).

An issue with what is been inferred in these calcs is the fact there is a water body on part of the depooit (as I suspect they will mine away from the water body to avoid cost blowouts hence some of that resource in your calcs I think will be stranded - just a guess as well).

However, I find calculations of in ground value can be problematic because you need to put in place cost criteria over the calculations, as well as a timeframe for development (because ultimately meeting hurdle rates are the key to an investment decision, but clearly AVZ does have scale and size here and in the past I have stipulated a production rate of treating 5 mtpa ore to 10mtpa ore is what will drive project viability here, or another way to put it, production needs to be some one to two million tonnes 6% grade spodumene per year to drive project economics here (or say assuming a 5 mtpa ore feed start up 500,000 tonnes of 6% spodumene concentrate and 67,000 tonnes lithium carbonate production). And obviously the tin a key to been used to partially (or fully offset transport costs) etc.

The key point however is your post also confirms IMO the sheer size of what we have there, just a question of cost and scale.

Blabberings from an empty VB stubby.

All IMO