AVZ 0.00% 78.0¢ avz minerals limited

Lots of info. LANGFORD • Important to differentiate between...

  1. 2,119 Posts.
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    Lots of info.

    LANGFORD
    • Important to differentiate between 'battery' grade and 'industrial' grade. Industrial grade demand has low growth and sufficient supply growth. Battery grade demand growth is massive and supply grwoth is limited.
    • Emphasis on projects with low impurities for higher quality battery materials for new battery tech.
    • Initial spike in Chinese domestic carbonate spot prices (2015-2016) due to big spike in 85-100K EV buses being built in China.  Has come down since.  I'm guessing those buses would be using low energy density battery tech.   
    • Recent Chinese subsidy changes pushing longer range/higher quality batteries = push for battery grade materials + more lithium
    • Rapid EV growth Oct, Nov, Dec expected.  
    • Government banning of ICE vehicles results in people switching rapidly to EVs up to 7 years from deadline to avoid losing money of rapidly depreciating ICE vehicles. in host country
    • Supply side uncertainties and delays are a given. Timelines often not met.
    • Concentrate price holding up. High grade 6%+ concentrate getting US$1050/t, MIN $960, GXY $980 (5.7%). Higher grade, low impurity fetching better prices.

    FERGUSON
    * 27500m drilling complete.  4 drill rigs operation, 1 working on met test work.  42 drill holes in the resource estimate with only 31 having lab data.  Finished 75th hole.  Data should be out in 2-3 weeks.  Only 900m of 12km sampled or single pegmatite. 99% done about 1000m to finish. So, AVZ have released only 31 of 75 holes data which means a significant resource upgrade coming up soon.
    * MET testing in progress requiring 5 drill holes. 2 completed, 3 to go. 3 weeks to complete, then shipping to Australia for lab work.
    * Hydro plant.  Capacity of 64MW.  $10 mil to refurbish one unit (2 x 9MW generators).  85% of historical transmission line is useable (interesting!).   Mentions that dam has enough power (50MW) for carbonate plant which would require 45 mil upgrade to hydro plant. Coincidentally, I recall Dathomir and Cominiere were committed to spending US45M to rehabilitate this hydro dam (Dathomir has 10% stake in project + 13% in AVZ).
    * No water problems.
    * Transportation in studies going east to lake, barge to Kagoma and rail to port.  SS come up with US$221/t current prelim transport cost.  Talking to transporter, he believes this amount can be reduced 'by a substantiate amount'.  Claims numbers are conservative.
    * Environmental study acceptance usually takes 2 months
    * Applying for a 5 or so year tax break as a 'special project' for the area.
    * Good support locally from government (governor + federal mines minister)
    * Construction 9 months.  Commissioning aim Q2 2020.
    * 8 million cash
    * Very low iron and other unwanted contaminants fitting in with requirement for new generation of batteries.  Simple mining.  Tin credits to be included in Feasibility study.
    * Feasibility study 9 months
    * Belgians produced 6.8% concentrate.  AVZ Expecting 6-6.5% after optimization.
    Last edited by Dr_Manhattan: 27/10/18
 
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