I don't think anyone could tell you right now what the merged...

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Wilma85

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20/01/19

04:20

Post #: 37166575
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Originally posted by johnwightman ↑

Originally posted by Wilma85
Hi John, I disagree. At the time that a DFS would have been completed lithium prices were near their peak, I think the numbers in the DFS would have been compelling and a FID to proceed would have been made. I concede that a DFS would likely have required us to define a larger resource in order to increase the LOM, which naturally would have cost us both time and money.

I don't disagree that completing a DFS assists in de-risking a project, there is no disputing that. Alliance rolled the dice in the belief that the economics of the project are good and that the time and money spent on drilling and completing a DFS would be better spent on fast-tracking project development. There is no question that this approach carries a higher degree of risk and that alone is enough reason for some not to invest in the stock and that is fine.

A40 doesn't carry the burden of a having a large debt to repay and, IMO, the operational and offtake issues we've experienced so far are not unique to us and are would not have been prevented by completing a DFS.

Time will tell if A40 turns out to be a winner or a loser, either way MC will play a major role in determining which it is.
Hi Wilma I agree with most of what you say but with the following exceptions. In addition to the larger reserve, there would have been a need for successful conversion of the spod con to a saleable chemical product. The boys at the top end of town, like Tianqi are a fully integrated lithium operator, so in control of the whole process from pit to final product. A40's PFS premise was that somebody would buy it because it could attain 6 % Li20 and less than 1% Fe203 etc.

This was not verified.

The other thing you mention is the "low" debt. Why does nobody ever mention the actual number? Does anybody know? I don't but I'm not an accountant and I've seen some cash go out of the door which far exceeds the income. When does low debt become high debt?

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I don't think anyone could tell you right now what the merged entity's current debt is. We don't know how much of the Tribeca loan facility has been drawn down. We know the estimated merger costs are $18m but we don't know how much of those costs have been paid and what remain outstanding (I imagine the ~$10m stamp duty hasn't been paid yet).

We will know exactly what the debt level is in less than two weeks.

A40 Price at posting: 21.0¢ Sentiment: None Disclosure: Held
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I don't think anyone could tell you right now what the merged...

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