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DairyqueenSA

362 Posts.

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23/12/21

03:42

Post #: 58474378
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Originally posted by investinvest: ↑

Not cross-promoting (I do not hold any AKE shares) but to use as a reference point: AKE (Orocobre) announced the feasibility study for their James Bay hard rock lithium project in Canada on 21/12/2021.

James Bay resource estimate 40.3 Mt @ 1.4% Li2O which includes a reserve estimate of 37.2 Mt @ 1.3%. AVZ (Roche Dure only) resource estimate 400 Mt @ 1.65% (more than 11 times larger) which includes a reserve estimate of 131.7 Mt @ 1.63% Li2O (4.4 times larger).

James Bay aiming to produce 321 ktpa of 5.6% Li2O whereas AVZ at least 700ktpa minimum 6% Li2O (more than double of a 10% higher grade product).

James Bay CAPEX USD$286 million is a little more than half of AVZ's proposed CAPEX of USD$545 million.

James Bay waste to ore strip ratio is 3.5 to 1 whereas AVZ has a much lower waste ratio at 0.48 to 1 (i.e. 7 times less waste).

The point is, the James Bay has a pre-tax NPV of USD$1.42 billion ~ AUD$2 billion. If we loosely assume that the sovereign risk of DRC and increased CAPEX factors are offset by our doubly higher production rates (at minimum) of a higher quality product (not including the upgrade to primary lithium sulfate) and 7 times lower waste ratio, then by just comparing resource/reserve estimate we can loosely estimate that maybe our pre-tax NPV is between roughly AUD$9 billion to AUD$22 billion. Looks like a lot of upside to me.

Note that I did not include CDL as I use that factor to offset against AVZ's current 51% ownership of the project. And I have not included tin i.e. further upside.

DYOR. AIMO

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AVZ speaks for itself if you do research.

AVZ Price at posting: 68.5¢ Sentiment: Buy Disclosure: Held
14 Upvote

0 Great analysis

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