Great post on the LTR blog by Freehold on the problems LTR will have cost wise and practical wise being able to get access to their mineable resources. I suggest forum members go over there and have a read.
Why?
This is a good exercise because one can then appreciate the difference in our proposed open pit mine to understand AVZ’s great advantage! We have ore at and near surface with the lowest strip ratio, and homogenous makes us super easy and cheap to mine with minimal ore feed to produce lithium product. Also, we have consistent grade and size of spodumene crystals making it easy and cheap to convert to battery grade. AVZ has also been adjudged by lithium hydroxide plant makers as having the purest product of all hard rock lithium deposits which lowers the cost of removing impurities decreasing conversion costs.
BTW LTR also have a proposed open pit mine as well which is very problematic. It has an 8:1 strip ratio, differential grade, and some very low grade of 1.1 %. What all that means is a lot of overburden which means much greater ore feed to produce lithium product, and therefore much higher costs, and also the differential grade means it is a lot more costlier to convert; think of all the calibration manipulations required for conversion!
AVZ’s size is what will determine its growth. Being the largest, 400 Mt @1.65Li20, with an exploration target of 1.5 billion tonnes which Managing Director Nigel Ferguson believes can be easily obtained is what gives us the advantage to expand and be a very valuable +5 billion dollar company. This is why we can have a start up of 10 Mtpa which is a H.U.G.E. output. (2 times greater than PLS’s 2 plants combined-MC 6.6 Bn! )With our other monster pegmatite Carriere de l’Este another 10 Mtpa plant can be easily achieved=20 Mtpa! Add 2 primary lithium sulphate trains, a value added precursor to lithium hydroxide and tin credits from the 3rd largest tin resource globally! Also to add is a lithium hydroxide plant which is proposed on site.(feasibility study) Therefore it is good exercise again to compare the pair and realise that LTR will only have a 2 Mtpa plant, so AVZ’s capacity for growth on an economy of scale is huge(20Mtpa).
Also it is important to realise what is driving the need for a 10 Mtpa start up. It is our huge offtake deals, with CATL(the world’s largest lithium ion battery maker) being the driver behind the need to obtain a large supply of lithium to service its huge contracts with major car companies, and to address the global lithium deficit. In contrast for the exercise at hand it is important to note that LTR has NO offtake deals!
Collectively what all this means is that not all lithium deposits are created equal, and therefore an investor should be very careful that they understand the practicalities and economics involved in the mining and conversion of lithium ore, and the size of offtakes with all these factors ultimately determining whether a deposit is economic to mine, and further, the growth potential of that mine in the future!
Therefore, when I compare the pair it is a no brainer why I am invested in AVZ and not LTR!
Exciting times ahead for AVZ holders!
AIMO
P.S.
What at 10 Mtpa plant start up means:
