RuudinFrance wrote: tiger6301 wrote: Hi Ruudin & Neo,
NLC has plenty of cash to last at least another 18 monthes. It's my opinion that NLC should spend some money to drill some holes in the northern high grade area, one is to increase the high grade resource size, two is to convert the inferred resource into indicated resource. Since for the future Final Feasibility Study, it is not allowed to use the inferred resource based on the Code.
Now it is winter in south american, so the management should plan for the next drilling season, rather than waste another year. Drilling can be done in winter, but it cost more.
Based on the ground conditions, it is difficult to drill in a soft or loose soil condition with diamond drill, it must be a combination of rotatory and diamond drill. Sonic drilling may be more suitable than regular rotatory and it can do samplling as well. With sonic drill, it can get at least 100 to 200 meters or 300 to 600 feet, then switch to diamond drill (I am not a driller but a Geotechnical Engineer, and my company are doing all sort of drilling work, not for exploration but for seepage control).
As mentioned above, incease the high grade resource is one of the priority (if you see LAC's presentation, NLC's resource size is way behind a few other companies).
The 2nd priority is to fine tuning the chemical process to lower the impurity, and incrase purity of the BG lithium.
The 3rd priority is the Final Feasibility Study. For the FFS, it will need the finalized the BG lithium process, need the resource size and grade to calculate the pond size, life of the mine, etc.
I just hope the management is doing their best, do what they can control, one step at a time, and make good progress.
tiger
Hi Tiger,
thanks for your thoughts.
I will address the blue colored sections in your post:
Enough cash:
Sure, NLC has a lot of cash, but you have to remember how Waldo lost control over LAC.
It is my opinion that being financially prudent is of the utmost importance. We know what we've got and we know what we so easily can lose. Until final signatures have been obtained we're defenceless sheep among the wolves. The slightest smell of a lack of money will make an even handed financial deal impossible. The robber barons will then take care of us.
I kid you not, having the cash is at present more important than improving the project.
It may be even so that present cash is part of the deal and it may not be wasted in order to keep the deal as it is.
If it were not for SARS-CoV-2, we would already have a joint venture signed and ample money to develop 3Q.
Maybe our "friendly" partner uses COVID as an excuse to use falling world prices for engineering a "new" deal. With "big money" there are no friends.
Get out the lounge chairs and wait them out!
Final feasibility study: We'll do the FFS after the deal has been signed off. NLC has mentioned something like that before.
Take a firm position. In case the partner wants progress, let them finance it. The cost may be subtracted from the deal at closing and otherwise (no deal) it's been a free contribution showing their good faith.
Never forget that we've got what they want.
Waste another year:
Another year "wasted" (will not happen), means that we've kept control. We've not become another stolen LAC case.
Combination of rotatory and diamond drill: This is technical and may well be possible, depending on when solid aggregate "rock" will be encountered. Maybe it's all "flowing sands" way down to bedrock.
Maybe they already pushed down with rotary to bedrock and found the above to be true.
Be assured that the prospective partner knows all about it.
Fine tuning the chemical process: As long as the customer(s) specification(s) are unknown, this would be a useless excersize.
It may be persued, but only in case the cost is very low for NLC, or in case the partner finances it as described under "FFS" and even then all under NLC admin control.
The management is doing their best: Up to now, they've shown a world class performance.
You may believe that they are put under tremendous pressure by the "wolves" (including BoA-ML).
The good thing is that with the passing of time, the pressure on prospective partners (not talking about only one now), is rising exponentially and eventually may result in a deal with another partner.
I would believe that a MoU already is in place (normal practice), penalties and all.
I would believe that discussions may come to conclusions via internet services.
I would believe that contracts can be signed by proxies (Toronto maybe?).
I would believe that another prospective partner may come to the conclusion that it would be better for them to pay the (wild guess) $10 million default penalty for NLC in order to "steal" the deal from the current prospective partner.
For NLC to accept such an offer, the offer should be advantageous compared to the standing one.
I feel confident that NLC is happy (more than just the financial part) with the current partner, but when push come to shove, they may change their mind.
If this takes too long, we may end up in a desperate bidding war.
Have fun.