RE: Rock Stock / KP interview5 Feb 2023 19:57
"KP worried me with his statement that they will pay less than S900 for ALL spod"
Mick, thein effect reality from the deal is that they are not buying any spodumene mined from Ewoyaa (and definirly not from Atlantic), they instead will be the (joint) mine owners, they will own the ore before any production. Peidmont are buying around half a mine for $103m plus half any capex overrun above 70m. I guess their bill will total around 140m in the end.
As part owners of CCLP Peidmont will also be liable for around half the mining costs. This is what Phillips is on about when he stated: "in Ghana we'll get more tonnes at lower cost", he is looking at Ewoyaa's OPEX, far lower than the 900/t they will pay NAL. The SC6 pricing formula is about the pricing being set between CCLP and Peidmont Lithium Ghana, it's accounting transparency since CCLP will have 3 share holders. Peidmont pays that to CCLP, then gets around that much back minus costs via what they will earn from owning their stake in CCLP.
For Peidmont this is the benefit of vertical integration. For Atlantic (and their share holders - us) the benefit from the deal is two fold:
*we have been paid cash to explore, develop and then mostly build this mine, avoiding raising that from the market has saved what would have been a great deal of expensive dilution on a then ~£100m company,
*we have consequently been able to fast track the development, I don't think they could have moved as fast whilst having to also do multiple raising.
Pre the deal Atlantic as Iron Ridge I think spent around 40m over 5 years bringing on Ghanaian lithium prospects. For that and with this deal and all going well they will end up with a large 45% stake in a mine I suspect will have many years of multiple billion earnings.
Investing in a win-win for all concerned aisi.
Spodumene software as Mr Klein likes to opine!!
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