Century Lithium Corp V.LCE

RE:Going forward ....Step by step

[fulogas1]

 

@EpsteinResearch $CYP -- It's my understanding that the work the company is doing with CMS and Noram on Chloride leaching should be done in the next 45-60 days. The costs are not high, and it does not impact the operations of the pilot plant. If the findings are that Chloride leaching is not meaningfully better than using sulfuric acid, then we are back to where we were, which is in a very good spot. However, if the PFS can be contemplated without an acid plant, without the logistics & cost of moving elemental sulfur and then sulfuric acid around the site, the cost savings in BOTH cap-ex & op-ex would be very significant. The acid plant is budgeted at $102.5M out of a total cap-ex figure of $493M. But, there are PPE items associated with the acid plant that could be eliminated. I bet that total cap-ex could be reduced by 25% (20% [$95M] of the $493M cap-ex is "contingency & working capital, so that figure would come down as well). On the op-ex side, it's been stated that sulphur and sulfur-related expenses account for approx. 1/3 of op-ex/tonne. Let's say that both op-ex & cap-ex could be reduced by 20% each. Then, by my rough calculations the after-tax NPV(8%) at a LCE price of US$11,875/tonne (more in line with peer projects averaging US$12,631/tonne) would be US$1.8 billion vs. cap-ex of US$394M and op-ex of US$2,664/tonne. That's a NPV to cap-ex ratio of 4.6 to 1. So, that's what COULD BE in the cards for shareholders, and we should get word on that early next year. One more thing... without the logistics & congestion of sulfur/sulfuric acid movements, Cypress could (logistically) produce more hydroxide/yr. than what's in the PFS. They might not ever want to produce more, but if lithium demand takes off in the mid-to-late 2020s and prices increase to say US$15k-US$20k/tonne, an extra 5k tonnes of hydroxide/yr. would be huge.
@EpsteinResearch $CYP -- It's my understanding that the work the company is doing with CMS and Noram on Chloride leaching should be done in the next 45-60 days. The costs are not high, and it does not impact the operations of the pilot plant. If the findings are that Chloride leaching is not meaningfully better than using sulfuric acid, then we are back to where we were, which is in a very good spot. However, if the PFS can be contemplated without an acid plant, without the logistics & cost of moving elemental sulfur and then sulfuric acid around the site, the cost savings in BOTH cap-ex & op-ex would be very significant. The acid plant is budgeted at $102.5M out of a total cap-ex figure of $493M. But, there are PPE items associated with the acid plant that could be eliminated. I bet that total cap-ex could be reduced by 25% (20% [$95M] of the $493M cap-ex is "contingency & working capital, so that figure would come down as well). On the op-ex side, it's been stated that sulphur and sulfur-related expenses account for approx. 1/3 of op-ex/tonne. Let's say that both op-ex & cap-ex could be reduced by 20% each. Then, by my rough calculations the after-tax NPV(8%) at a LCE price of US$11,875/tonne (more in line with peer projects averaging US$12,631/tonne) would be US$1.8 billion vs. cap-ex of US$394M and op-ex of US$2,664/tonne. That's a NPV to cap-ex ratio of 4.6 to 1. So, that's what COULD BE in the cards for shareholders, and we should get word on that early next year. One more thing... without the logistics & congestion of sulfur/sulfuric acid movements, Cypress could (logistically) produce more hydroxide/yr. than what's in the PFS. They might not ever want to produce more, but if lithium demand takes off in the mid-to-late 2020s and prices increase to say US$15k-US$20k/tonne, an extra 5k tonnes of hydroxide/yr. would be huge.