A40 0.00% 8.2¢ alita resources limited

I agree that this downstream integration is the best part, PLS...

  1. 1,485 Posts.
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    I agree that this downstream integration is the best part, PLS for example will have to cough up hundreds of millions for their share of constructing the hyrdoxide plant, and probably wont see benefits for 2-3 years from FID. Similar story to KDR, several hundreds of millions in capex and 3 years waiting for construction and commissioning. If we can make this MOU binding on the other hand, we stroll right in from Q4 this year and the only "capex" equivalent would be maybe $10M-$15M of spod that we send over to kick things off before being paid a month or two after in equivalent hydroxide sales.

    At the same time as we get the hydroxide sales coming in, we get the benefit of the fines circuit. Given we have stockpiled a sh*tload of fines to date, the mining cost $/t from the fourth quarter of this year will be small since all of the mining costs related to the fines are effectively pre-paid for until the 1+ years worth of fines stockpile is used up.

    This company just needs to survive until Q4 and cash will be extremely tight until then (it can't be too dire a situation though if they are happy to throw some money at drilling out the resource). If things are as bad as some seem to think, I'd rather a small CR now if it means we can sow up another downstream deal instead of asking for pre-payments... don't think a downstream deal + pre payment at the same time would be reasonable to assume.
 
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