Ann: Restructure of Lithium Offtake Agreements, page-206

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johnwightman

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19/01/19

19:48

Post #: 37165585
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Originally posted by Wilma85: ↑

Should we have completed a DFS before proceeding with construction of DMS 1? We'll never know. I don't think we'll be able to answer that for at least another 6-12 months and even then we still may not have definitive answer to that.

AJM completed a DFS and stated that the project had a "...capital estimate of A$139.7 million including sustaining capital and a payback period of 1.8 years". How is that working out so far?

I am big supporter of completing a DFS before developing a project as I have been burnt once before. I have also seen many companies complete a DFS and/or BFS only for the figures to be miles off once the project was completed and production had commenced.

Alliance's operational issues so far, IMO, would have occurred whether a DFS was completed or not.

I was on Chevron's >US$30bn Wheatstone Project for over 5 years. I witnessed both timeframe and capex blowouts. They experienced engineering, procurement, construction, commissioning and production issues. I realise that an LNG plant is much more technically complex than a lithium plant, but the nature of the O&G and mining sectors is that you will almost inevitably encounter issues and development and operational will not be seamless.

I notice you didn't respond to this post - https://hotcopper.com.au/threads/a4...their-spiral.4605780/page-88?post_id=37159475

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Hi Wilma, I am of the belief that if a DFS had been carried out, it would have indicated a high degree of risk, and therefore not proceeded, especially the way it did. Time will tell.

A40 Price at posting: 21.0¢ Sentiment: Sell Disclosure: Held
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Ann: Restructure of Lithium Offtake Agreements, page-206

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