RE: Annual Report to Shareholders31 Mar 2026 05:16
The core DFS numbers are: 37,500 tpa lithium carbonate production, initial CAPEX US$2.1649bn before grants, US$1.7039bn net of approved grants, C1 cost US$12,492/t, and AISC US$13,673/t in real dollars. The DFS also states construction is expected from July 2027 to August 2031, the estimate is a Class 3 capital estimate, and the project is assumed to be executed on an EPCM basis with no EPC contractor risk mark-up included in base costs.
The grant treatment matters. The Czech government support is described as up to EUR 360m, representing up to 26% of eligible capital costs, and the JTF grant is US$36m / CZK 800m. Because those grants are capped amounts rather than an open-ended percentage of all future overruns, the sensible way to model overruns is: apply capex escalation to the pre-grant CAPEX, then subtract the fixed approved grant caps. In other words, overruns mostly land on the ungranted portion.
On lithium pricing, your “maybe 24k” instinct is high versus spot today. A current China battery-grade lithium carbonate spot proxy is about US$20.8k/t on SMM as of 31 March 2026. Reuters also reported analyst expectations for 2026 in a very wide band of 80,000-200,000 yuan/t, which is roughly US$11k-27k/t depending on FX, while the DFS itself uses a US$26,000/t real long-term price based on Fastmarkets’ long-term forecast. So I would not use 24k as the “current” number. I’d use roughly 21k spot-ish, with 26k as the DFS long-term bull/base-development assumption.
Here is the modelling framework I used:
CAPEX scenarios: real overrun + nominal escalation during the build period.
OPEX scenarios: real operating slippage + inflation from today to first production.
Because DFS costs are in real dollars, I do think inflation belongs on top if you want likely nominal out-turn numbers by startup.
My scenario assumptions are:
Low: CAPEX +10% real overrun, then +10% cumulative escalation; OPEX +5% real, then +13% inflation to startup.
Base: CAPEX +20% real overrun, then +12.6% escalation; OPEX +10% real, then +15.9% inflation.
High: CAPEX +30% real overrun, then +17% escalation; OPEX +20% real, then +21.7% inflation.
Those are my scenarios, not company guidance. I anchored them off the DFS Class 3 range, the multi-year build window, and the fact that EPC contractor risk mark-up is not yet in the base cost.
1) Revised nominal CAPEX and OPEX scenarios
Using the DFS as the base:
Scenario Gross CAPEX before grants Net CAPEX after fixed grants Nominal C1 Nominal AISC
Low US$2.62bn US$2.16bn US$14,822/t US$16,223/t
Base US$2.93bn US$2.46bn US$15,926/t US$17,432/t
High US$3.29bn US$2.83bn US$18,243/t US$19,968/t
These are my calculations from the DFS base figures and fixed grant amounts. The key point is blunt: net funding need rises much faster than the headline “net of grants” DFS number once you model overruns on the pre-grant base.
2) Annual revenue and cash margin at 37,500 tpa
Using three lit
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