I agree with you in regards to debt and i will watch how PLS...

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CarrotGrunt

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13/06/17

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Post #: 25234245
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Originally posted by Kevyx ↑

I agree that brine projects may take some 18-24months to develop. This is the timeline given by the management over at AGY; 13 months to produce LCE product on a small scale, then I'd guesstimate 5-6 months for funding and decision to commit to large scale construction works. This is via tradition solar evaporation techniques. Will require in the vicinity of 100 to 200 million USD to fund depending on size. Slightly cheaper than hard rock mines but still a good chunk of any companies bank accounts.

Now, this could in theory be reduced with new brine processing methods. To my knowledge, Pure Energy Minerals, POSCO and others are achieving encouraging results. These could cut brine processing times from fortnight to hours. Of course, these are contingent on final test works.

I do not believe PLS will achieve production in 2018. They still have to sort out most of the construction plus the most important circuits are not yet installed. My belief is Mr Brisden has provided a very optimistic timeline but will once again under deliver. In addition the NPV of the Pilgangora mine is around 700m USD from memory. Unfortunately this doesn't give the Market cap a lot of room to grow compared to other producers. It is also extremely important to note the substantial amount of debt PLS will carry even before production: 80-100m USD. Assuming interest rate of 10%, interest payments of circa 10-13mil AUD per annum will take a substantial bite out of the company's bottom line. Hence even a short delay to production will hit shareholder equity hard, and hit project development funds even harder. This is compounded given the extremly tight budget. There is definitely risk. I reference the near death experience GXY had a few years back at the hand of leverage.

Feedback is welcome.

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I agree with you in regards to debt and i will watch how PLS performs with your above comments in mind. One of the reasons i favour $TAW is the fact that they do and will have no debt.

I will also be watching all the different Brine processing techniques as they could be game changers, including Neometals process.
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I agree with you in regards to debt and i will watch how PLS...

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