Full of Resources

Atlantic Lithium taken over by Huayou Cobalt at 18.8p per share. Not surprised but the price seems low, considering Assore (largest shareholder at 26%) were happy to pay c.30p at similar spod prices, before permitting. They kept buying blocks at 25p. The statement suggests that Assore is open to higher offers. Maybe CATL ? #ALL #A11 #AtlanticLithium

@sparkes_dwayne @Trisseswe Yes the metallurgy is good.

I mean >90-100Mt is preferred these days. However, i don't mind this project. Its quite close to a port. I haven't had a look at the mett work, but from the few pics I've seen of the core the spodumene looks quite course. if they can get away with using a DMS for relativley ok recoveries, I'd say the Chinese will definitely be interested in it. I mean Sinomine took $31million in Tyranna who don't even have a JORC resource... So whilst large resources are preferred and will get funding in the west, i think the Chinese will take whatever they can get their hands on. Cheers

Some random thoughts on some of the latest lithium news as a I sip my morning coffee. CATL has brought in Chen Zinghe from Zijin as an advisor for it’s mining division. It’s basically CATL saying they are worried that they can’t find enough lithium to meet their massive growth. It’s impressive how fast CATL has grown and you’ve got to applaud the company. However, I think they are leaving it a bit late as I touched on in an old post of mine (link below). I think they’ve underestimated just how difficult it is to find lithium deposits. Economical lithium deposits are rare and very hard to find. They could go years and find nothing. Zijin doesn’t have a great track record at finding deposits, which is rightly so, they are after all miners, not explorers. And it’s not just Zijin. What was the last deposit that RIO found? Or BHP? Or FMG? The majors are terrible at exploration, despite the fact they have very large exploration budgets. Exploration isn’t just about having a big budget. A geologist working for a major for a wage in a cookie cutter position is going to be less hungry to find something than a prospector working for themselves for 0 dollars and funding early exploration themselves. Projects are largely found by individuals, they then get passed into exploration companies, which then get taken out by miners. Basically every (~90%) current lithium mine and the majority of lithium resources (excluding a lot of the Canadian plays) have been mapped and known about for a 100+ years. Most of them were old tin and tantalum mines. Adover, Kathleen Valley, Pilgangoora, Tabba Tabba, Bikitia, Manono, Greenbushes, Mt Marion, etc. were all discovered over 60 years ago, largely by individual prospectors. During the last lithium boom, if you wanted to find lithium, you toggled on/georeferenced the occurrences of old tin and tantalum workings, pegged the ground, and explored off that. Those days are done. Those are our current lithium mines and resources. So 100 + years of mapping and exploring has found the current mines and resources and we are still in a lithium deficit (spod currently at ~$US2400). I agree with @usuallyYJLee , there isn’t enough mapped lithium around to meet his 2030 bull case. Literally all of the Canadian plays would need to come online. So naturally sodium and other battery types will take a portion of the market for this fact alone. Zijin aren’t explorers. They are miners. Huge difference. A lot of countries don’t understand exploration. The idea of putting capital into what could be seen as a gamble is something they don’t get. They are happy to pay a premium for a nice resource, but the idea of spending a fraction of what they pay for a resource on a “gamble” seems silly. I personally think Zijin (and any major) will struggle to find more greenfields lithium. All the easy low hanging fruit deposits are gone. It’s now largely a drilling under cover game. Once you’ve dusted your first 4-5million on drilling, you start to think maybe it’s just easier to buy these things for a premium. Problem is there aren't really many options available. Exploration for lithium has been on a halt for several years and despite spod at a very healthy price of ~US$2400, it still hasn't picked up yet. Better get exploring soon or big trouble. To finish, on a side note, $PLS just hit an all time high! Cheers for reading!

@runitsports I agree we might not hear anything today but I dont expect any selling for it.

Selling some $lqda here. Only because I dont think we get anything from the judge and people will panic dump.

Lithium prices keep rising... #ALL #A11 @AtlanticLithium

Another smart comment below. Could add upside pressure to spodumene prices.

Geology as warfare...

Brilliant analysis below of one of the world's largest spodumene deposits.

@sparkes_dwayne @Trisseswe Brilliant analysis as always. Thanks. Any similar review of the Ewoyaa project in Ghana? Significantly smaller resource but I keep being told that the product metallurgy is above average quality and infrastructure / logistics much better.

Saw this article today on the Manono North Deposit and just couldn’t help myself but to make comment. I'll also give my opinion on the deposit as I've had a few people ask for it. Firstly, the deposit was stolen from AVZ shareholders. I hope AVZ holders get what they deserve for this deposit and it's absolutely pathetic by the Australian government to sit idle. Lots of hard earned Aussie dollars were put into exploring and developing the orebody and the government stays silent? This orebody needed to stay under the one company in order for it to achieve its maximum potential. Zijin gained control of what is now known as Manono North which predominantly consists of the The Carriere de l’Este Pegmatite, often referenced as the CDL Pegmatite. I do think it's the inferior part of the orebody. It's lower grade than the Roche Dure Pegmatite (not in Zijin's control and to the south) and from an early stage, it seems its metallurgy wont be as good. Personally I think splitting the deposit up was also a technical mistake. I think it was important from a metallurgy point of view to keep the both the north and south together. The article states that the Manono North mine will produce up to 130,000 tonnes of LCE per year. I’d argue it won’t be anywhere even close to this. 40.4/(0.82*6) = 8.2 tonnes of SC6 per tonne of LCE. 130,000 * 8.2 = 1.06 million tonnes of SC6. 6/(1.58*0.7) = 5.43 tonnes of 1.58% ore needed per tonne of SC6. I’ve used a very generous recovery rate of 70% and you’ll see why it's generous later. 1.06million tonnes * 5.43 = 5.75Mtpa This seems doable but the problem is, I don’t think Manono North is going to produce SC6 looking at historical met work and its grade. I think Manono will join the same club as LTR, PLS, MIN, in terms of recoveries. It’s not Greenbushes. I think it will produce somewhere around SC5.2. 40.4/(0.82*5.2) = 9.47 tonnes of SC5.2 needed per tonne of LCE. It becomes very different when you plug this in. So they are going to need far more than the 850kt of concentrate as stated within the article to produce those 130kt of LCE. At the time Zijin took control of the north section, the resource was entirely inferred. This is understandable given the lack of drillholes and met work that had been undertaken (AVZ were mainly focusing on the south and doing a great job). I could be mistaken, but I haven’t seen anything via satellite (generally signs of drillholes are easily identifiable) that suggest Zijin has done further work to progress the deposit from Inferred to indicated or measured. So there's a decent chance that the proper work hasn't gone into understanding CDL and it's getting rushed. One thing that is important to understand is that size of the deposit just one of the many criteria which should be used to rank a deposit. If the deposit is larger than 90-100Mt, I’d say it gets less and less important. Grade and metallurgy become king. So, Manono North is large, but lets talk about its grade and metallurgy. I dug into historical metallurgy testwork undertaken on the CDL pegmatite and it was average. I can’t find any flotation testwork done on CDL specifically, but the DMS testwork gave 55% recoveries for 5.6mm size and 66% for 3.35mm size. But here's the issue, the head grade used in these tests was 2.37% Li2O. The average grade of the deposit is 1.58% Li2O … What happens if you plug in the average grade of the deposit? So that rules out it being purely a DMS deposit and flotation will be required. Here’s some info from an old post on DMS and flotation from an older post of mine: x.com/sparkes_dwayne… So they’ll need to float it which means higher CAPEX and OPEX. There is some flotation test work done on the pegmatite to the south so I’ll use that as a bit of a guide (It’s a rough guide as metallurgy can change rapidly over 50 meters let alone kms). It came in at 81.5%. Lab work always comes in higher. Every single time. Also it's important to note that this test work was done on a higher grade pegmatite than CDL. One example which is comparable from a testwork and grade point of view is Kathleen Valley. Manono south's testwork for flotation comes in at almost identical to how Kathleen valley’s (whole of ore flotation not DMS + flotation) did. 81.5% vs 81%. Liontown’s recovery is now at ~63% for SC5.2, 18% less than what the test work gave and not for SC6 as their test work suggested. Just an example how lab tests don't equal what actually happens in practice. Summary: So in my opinion, Manono North will be somewhat similar to another Kathleen valley or Wodgina coming online. It's grade is somewhat above average @ 1.58% and I'd say its metallurgy is average. Yes it's large, but above 90-100Mt, this becomes less important. So overall a good deposit, but it's no Greenbushes and i don't believe it will spit out the tonnes as what many are suggesting. In order to get those tonnes you're going to need an extremely large capex and i don't think Zijin will invest that much given the nature as to how they got the deposit and also the jurisdiction (unstable). Those are my thoughts on the Manono North Deposit. Cheers for reading.

@Trisseswe @AtlanticLithium Likely Longstate selling down in a weak market. It didn't stop the shares doing 3x over the past few months with them selling. It won't change the outcome imv: 30-35p in q2. Or much higher if #ALL goes through with FID in H2.

@FullOfResources @AtlanticLithium What’s holding Atlantic down?

Lithium prices up again in Asia. Lithium names are flying on the ASX. Note how Elevra Lithium is rerating. I would add them to the list of potential buyers of @AtlanticLithium alongside Assore and Chinese producers. #ALL #A11

Elevra is about 5x the market cap of Atlantic and yet with similar targets to produce just over 300ktpa of spodumene concentrate by 2029/2030. Obviously Elevra is already a producer, so definitely more advanced and derisked but you can see the logic for them to buy Atlantic at 30-35p and be highly value accretive for Elevra shareholders. #ALL #A11 $ELVR #ELV

#lithium #ALL #A11

The EV/battery/lithium sector is going to benefit from the sad conflict in the middle east. @AtlanticLithium is the only fully permitted quality spodumene project in Africa that has not yet been acquired by larger lithium producers. And it is still valued at only 20% of Project NPV using conservative assumptions. #ALL #A11

Strange situation where we await a statement from Iran to check whether there's any truth to what US president is saying.

@ElevraLithium $ELVR up 8% today on the back of the mining lease ratificaton news from @AtlanticLithium. While it is frustrating to see #ALL sp down today, the mkt reaction for Elevra means that Elevra's mngt will be motivated to resume their funding commitment to the Ewoyaa project.

this is not priced in yet 👇👇👇... Lithium prices will keep rising this year and next....

So what is fair value today for #ALL #A11 @AtlanticLithium ? I use $2,000/tn SC6 pricing (been above that for weeks). I assume $750/tn AISC, $225M Capex with realistic capex spend curve & production ramp up (See summary table below), I get 71p NPV. Today, fully permitted with DFS Class-3 engineering definition (assuming higher capex/opex in a DFS update), pre/near FID, fair value should be 50% of NPV. My SP target over the next few weeks is thus 35p, 2x from today's price. Fast fwd to the end of the year with funding in place and likely higher lithium prices, you can easily get to 50-60p. But I think ALL will be long gone by then. Funding will be easy. Atlantic only needs to raise c. $75M to fund their share of the capex. Could be done with a non-dilutive prepay offtake ($75M is only a few months worth of product sales). If I had to speculate on a likely outcome, a large Chinese lithium player and/or Assore will make an offer to buy 100% of ALL at 30-35p very soon.

This should now trade around 50% of project NPV. I'll run project numbers tomorrow with conservative input. 18p/33cts is bargain territory here... #ALL #A11 #AtlanticLithium