Lake Way development2 May 2018 17:06
I have been looking back and re reading some earlier RNS announcements in the context of overall costs and also the pilot plant,
The scooping study RNS of 30 August 2016 puts overall costs at AUD $ 223.7m for a 200,000 tpa production plant and a further AUD $43.9m to scale up to 400,000 tpa. The total figure is requoted in the March 2018 company presentation.
The pilot plant RNS of 20 April 2017 suggests a cost of US$ 35m to produce a 40,000t pilot plant . There is also the following paragraph;
''�..the Company has formed the view that the appropriate path forward is to initially construct a Pilot Plant to demonstrate the technical and commercial viability of brine SOP production from the Goldfields Salt Lakes Project, before expanding the plant to long term optimal production levels on a staged, modular basis.''
If the Company operates the staged modular basis then in my view this effectively stages the CAPEX costs and as each module is added then increased production increases profits which can be recycled to fund debt and the next module construction.
We have to await the scoping study which is due mid this year,to see if this approach is to be adopted .It would in my view significantly reduce the overall risk of having very large debt up front. We also have the Blackham MOU which the company has said will reduce costs. The Mitsubishi MOU also suggests support.
It hasperhaps taken a while to get to the current stage, perhaps longer than I had envisaged but I do hope the Scoping Study together with the Blackham and Mitsubish agreements will accelerate our move forward to production.
GLA
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