Thank PF for that info. There is another aspect to the lithium story that is under realised by most, that being the sheer growth rate over the next few years of the use of lithium. Even if we go to 200mt+, it will still be a drop in the ocean compared to what is needed when the world goes electric over fossil fuels. This will happen because of peak oil/climate change.
We are not talking just cars here. We are talking trucks, tractors, earth moving machinery, mining plants isolated from the grid, grid storage, etc. The overall amount needed will totally swamp supply so the price must rise to make currently unviable sources viable. This means a doubling or more of price from current levels in real terms over the next few years and possibly a doubling again in the next decade.
Every 'future supply' graph shows great growth, but nothing compared to what just the car manufacturers say they are going to do. The 2 just don't add up.
One doubling in price from here, would make a 3mt/a plant profitable to a level few think of. At 4t of ore to make 1 tonne of 6%+ Spodumene concentrate equals 750,000t of concentrate, worth $750m/a!!!
Using the $90/t of concentrate as a cost base (from Altura's scoping study on a smaller plant), costs would only be something like $67m/a.
Adding the profit from tantalum and a few costs, the overall profit for a long life mine would be in the order of $700m/a. That sort of business should be worth over $7b.
On a per share basis, taking 850m as the base after options, convertible notes etc, the price is over $8.20/sh.
For something that is 36.5c that is over a 20 bagger from current levels, but it will take a couple of years to get there.
PLS Price at posting:
36.5¢ Sentiment: Hold Disclosure: Held
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