These arguments are becoming pedantic between AVZ and MLL...

These arguments are becoming pedantic between AVZ and MLL holders IMO.

Capex/IRR/NPV
As to Woodie's your first point, AVZ is technically viable at US$525 per tonne price, full stop. Refer - Post #: 44177152 and Post #: 45096045

As to the issue of capex, the project can be scaled, and infact efficiencies improve with floatation. So lets get to the heart of it:
1. Stage 1 - 700,000 tpa spodumene concentrate using DMS. Less capex.
2. Stage 2 - 550,000 tpa spodumene concentrate and 45,000 t[a sulphate. This is where more additional capex goes.
3. Stage 3 - add floatation to increase recovery rate to about 80%, from around 60% - 65% under just a DMS option.

Stage 4 outside the DFS - expansion. Obviously the AVZ project is scoped to deal with entry, expansion and additions in future, but all this relies on economics been established at each stage and the market allowing AVZ's entry through demand>supply. The same goes for any greenfields project seeking to enter the market.

But as I posted on the MLL site, if prices are less than US$525 per tonne spodumene it means that EV demand is not growing towards 2000 GWh by 2030, meaning all greenfields projects are delayed so not sure why posters think a lower price in one stock will not adversely impact their own stock - for existing producers they will be in a world of further pain as well if low prices continue, without renegotiating debt levels, notwithstanding any dilution that might come with it. How people don't understand that is beyond me in these annoying and now getting rather, tiresome, debate between the two sets of holders - MLL and AVZ debating the various points when infact either one getting up is actually a good thing for the other. This side if the market any spec stock has its for and against, and people just need to be mindful when debating for and against they debate what is different between the stocks and where a competitive advantage can arise (i.e. price affects all stocks, but quality is a differentiation criteria as is level of capex spend and resource availability and extent thereof)

Costs and expansions
As to this other comment existing producers simply expand to meet demand - well firstly it is about extent of resource, then quality of resource and then how that resource reduces input costs to converters. I mean with comments like this you think you don't have substitutes. The fact of the matter is EV takeup is based on price, and if price of EVs don't fall and/or 'running costs are not reduced' and/or distance to recharge is not improved, takeup of EVs slows and people keep driving ICE vehicles. Remember more than a 1/3rd of an EV cost is the battery, notwithstanding you need to improve battery technology to reduce replacement costs because replacing a battery costs a lot of money - i.e. increase life of battery - and obviously you want to be extending range as well. Here is that post in MLL explaining this around EVs and demand forecasts - Post #: 46605799 It is why good deposits with low deleterious elements will be developed where economics is shown, because in a maturing market they are the ones that will be around and anything inferior dies (i.e look at the iron ore industry from development to who now dominates the market and what happened to other players over the last 30 years).

The way you scale to production to reduce capex costs, and therefore seek to fund additional expansions or part thereof from retained earnings is also a key to not only seeking initial capex for the project but funding thereafter. I agree with SF2TH that in an uncertain times financiers seek to reduce risk so providing capex is not just a function of NPV/IRR but size of capex but more importantly payback period. If your payback period is short then you are likely to get more capex funding is the point, because risks lower, and at the moment, unless spodumene prices improve, payback periods are longer.

Cobalt
Cobalt price falls is a sign of slowing demand, meaning IMO EV takeup is still yet to pickup towards teh growth traectory to 2000 GWh in 2030 and price stability is therefore required to maintain profit (i.e. that is what the Glencore decision is about that again Woody seems to quote but hasn't IMO delved into what is been done, noting Glencore does have a lot to gain in keeping that cobalt mine shut given it has a number of cobalt operations where price benefits will benefit that bottom line in otehr cobalt operations - it is what happens when an industry consolidates as well, and right now because we have a number of differing spodumene producers none of them can play the Glencore game is my point, i.e.AJM/PLS own just one mine etc etc). The growing lithium market is hydroxide because of NCM batteries in part which are 8:1:1, all in other words the anode still contains one unit cobalt in every 10 units. Cobalt demand is expected to grow under a 2000 GWh demand scenario, despite batteries having less cobalt. Or another way to put it is good quality cobalt and lithium and nickel and graphite deposits will be developed to meet demand so we will know the turnaround in the market when essentially we start seeing prices start trending upwards in all those minerals that form the EV battery makeup, albeit with the impact of COVID-19 on economic activity the problem in pricing is also some minerals serve more than one market (like steel strengthening etc and therefore price impacts are becaus eof a host of factors that might be away from slower EV growth as well) etc- Post #: 45972949.



Longer term
On lithium I expect spodumene prices to stabilise between US$550 per tonne to US$700 per tonne longer term, but be closer to US$600 per tonne average longer term. The days of over US$700 per tonne - $900 per tonne, as we saw back in 2017 and 2018 - are over is my point in a maturing market. If prices take longer to achieve this it means EV demand is not growing on the scale to 2000 GWh at the pace people think, meaning that demand is shifted to the right of 2030. And that means the development plans of all greenfields projects get delayed - why, NPV/IRR is one thing in a DFS, but it is demand that drives your entry into market and without that, and in partcular a supply gap caused by existing producers been unable to fill that gp, there is no greenfield mine, full stop

The interesting thing going forward is how WOF works against DMS/floatation. I have my personal views which I posted in these this post and the embedded post therein in the past - Post #: 46676339

Tiresome debate IMO between MLL and AVZ holders - choices have been made, it is now a question of management in either getting financing and offtakes, which where AVZ is at is the only thing IMO that will move the SP forward fro where it is currently at as I posted the last few months, and whoever gets it first will benefit the other. I suspect AVZ will get there first but that is a personal view, and time will tell. Sovereign risk is only one element in a buyers decision for spodumene purchases - the other is quality, especially quality in producing better batteries. It is why a lot of the inputs into EVs from copper through to cobalt through to graphite do not come from Australia/USA/Canada -again refer Post #: 45972949

Turing back to AVZ - it has been several years now and the resource and METs have shown a good output. But at the end of the day, only financing and offtakes (in other words the market believing mining will happen sometime between 2022 or 2023 - 2025) will be the only thing that moves SP from here IMO. SP is a function of future profitability and my opinion is the market is not currently pricing AVZ (or MLL) as getting to market this side of 2025, hence the market cap (and MC under this assumption would be impacted by sovereign risk perceptions hence why you might see some explorers in Oz with a higher MC). With Offtakes/funding and a market belief this will get to mining this side of 2025 MC will rise (despite the fact sovereign risk is an element of current MC is my point, with the key been payback periods - it is why mining companies with operations say in Africa who are in production can still have a high SP/MC - it is because they are in production is my point and demonstrating profitability thus making the market reassess sovereign risk in relation to that entity).

In relation to comments around kilns/sulphate refer 45802869

Sunday musings.

All IMO