ARGENTINA JORC 2012 compliant Lithium carbonate (LCE) Resources announced on two projects totalling 239,000 tonnes – 63% Measured & Indicated Grade up to 313mg/l Lithium – Lithium Carbonate Resource 2,000ha obtained – only 2 other holders in much sought after Salar – Geophysical Lithium Carbonate Resource survey Dec 2018 and Resource drilling planned for 2019
BMW announce a five year supply contract with Lithium supplier Ganfeng(Sep 18) with option for 3 additional years Currently 71 models of electric cars, 14 electric motor bikes and 10 electric commercial vehicles – predicted 134 models by 2022 By RudolfSimon - Own work, CC BY-SA 3.0, By Vauxford - Own work, CC BY-SA 4.0, https:// https://commons.wikimedia.org/w/index.php?c commons.wikimedia.org/w/index.php?curid=74114790 Tesla production up to 80,142 vehicles Q3 2018 urid=27355079 By Ride_and_Drive.jpg: Plug'n Drivederivative work: Mariordo - This file was derived from: Ride and Drive.jpg:, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=21911482 By CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=14927358 Source - https://www.statista.com/statistics/715421/tesla-quarterly-vehicle-production
Dyson investing £2.5 billion in electric car project in Singapore China targeting global domination of EV manufacture – E-bikes by Roland Irle, EV-volumes.com
Volatile in China but steady rise in US and Europe Li prices under pressure in 2019 from soft market in China But the electric vehicle(EV) and electric storage system(ESS) demand growth is projected to exceed supply into 2020 and beyond Source – William Adams head of base metals & battery research at Fastmarkets – 1 October 2018
Production cost Hard Rock Lithium Brine spodumene is US$5-6,000 per tonne Lithium Carbonate(LCE) Production cost Lithium Brine – Orecobre state US$3,800 to $4,640 per tonne – gross cash margin US$5,250 - 10,059 per tonne LCE Soft Brine production remains Hard Rock Spodumene profitable Source – Fastmarkets May 2019 Source – Deutsche Bank Markets Research March 2017
9 mining leases(minas) of 20,840 ha – 100% PNN SA Within Lithium Triangle which holds 65% of global Lithium Within mining friendly Salta Province
Initial JORC Resource Measured + Indicated 60,000 tonnes LCE + inferred 6,000 tonnes – grade up to 313mg/l Salar known for high flow rates Salar with good infrastructure
LCE Resource announced 173,000 tonnes 53% measured Low grade resource Blend potential product
Surface samples indicate viable lithium grades up to 296mg/l Geophysical survey indicates two distinct brine zones Drilling permit granted – resource drilling planned - 2019
Orecobre (ASX:ORE) Olaroz – Production 14,384 tpa – expansion in train to 42,500 tpa - production cost US$3,800-4,640pt - Resource 6.4mt LCE @ 690mg/l - Argosy(ASX:AGY) Rincon – Resource 245,120t LCE Indicated@ 325mg/l – Market cap $211m – stage 1 Production 1,500tpa in construction battery grade LCE produced from Pilot plant – tenure 2,794ha Rincon Lithiu(private equity) – Resource 3.5mt LCE Measured + 4.8mt Inferred grade 371mg/l – plant ANSTO design for 25,000tpa @US$4,000pt with 75% recovery direct extraction in 24 hrs no ponds - tenure approx. 23,000ha Lithium X (TSX-V:LIX) Sal de Los Angeles – Indicated resource 1mt @ 501mg/l & Inferred resource 1mt LCE @ 410mg/l plant in construction to produce 15,000tpa ponds in construction for 5,000tpa LCE. Tenure 8,154ha – Jan 2018 purchase of the Company by Nextview New Energy Lion Hong Kong Limited for US$257m – Company factor Value Comments Fastmarkets Lithium price US$11,580 3 May 19 max spot price FMC (NYSE:FMC-N) – Salar del Hombre Muerto – in Orecobre Lithium price US$9,451/tonne March 19 qtr production for > 20yrs – first Sony Lithium battery used FMC Orecobre Lithium price US$14,999/tonne Sep 18 qtr Lithium – 2 nd largest Lithium supplier globally – has resource for Orecobre LCE production cost US$4,200/tonne March 19 qtr Rincon LCE production cost – ANST method US$4,500/tonne Rincon Salar Pilot plant 75yrs @ 692mg/l – use direct adsorption method on site then truck Mining concentrate 90km to process - production 23,000tpa LCE – FMC Argosy Production of battery grade LCE – US$4,000/tonne Rincon Salar – Pilot plant US$4b sales pa. evaporation & concentration method Lithium X Project target production rate 15,000tpa FMC Partial processing on site Truck 90km through Andes Produces highest grade to process LCE product globally
Evaporate & concentrate each project – single processing plant Production of 14,485 tonnes LCE pa Unit cost to produce US$4.2k/tonne Revenue US$166m pa Profit after tax US$79m pa Tenure 7,717ha Capex US$222m, payback 2.8yrs, ROI 25.9% Estimated Project life 20 yrs NPV US$301m Terminal value US$81m Assumptions FMC transport concentrate 90km to process Unit cost is the Orocobre March 2019 quarter costs Sale price LCE US$11,500 – Fastmarkets spot price from China May 19 $11,580/tonne Capex – Plant US$100m, Transport set up US$40m, Ponds US$77m Discount rate applied NPV 10%
$9,500 $11,500 $14,500 Pular Rincon Incahuasi TOTAL Project summary p.a. ($'000 USD) 1,471 7,940 5,073 14,485 LCE production Tonnes per annum 16,920 91,309 58,344 166,573 Revenue per annum ($'000 USD) $0.9b $1.4b N E T $0.6b 63.5 (6,179) (33,348) (21,308) (60,835) Opex per annum ($'000 USD) 10,740 57,961 37,036 105,737 EBIT 40.6 (2,685) (14,490) (9,259) (26,434) Tax $163m $508m $301m 8,055 43,471 27,777 79,303 NPAT EBIT margin 63.5% 63.5% 63.5% 63.5% 47.6% 47.6% 47.6% NPAT margin 47.6% (22,573) (121,815) (77,837) (222,225) 3.9 Years 2.0 Years Capex & exploration costs ($'000 USD) 2.8 Years 35.7% 35.7% 35.7% 35.7% Return on Investment 2.8 2.8 2.8 2.8 Payback period (years) 50.4% 25.9% 35.7% 40.0 Key production metrics Pular Rincon Incahuasi Brine Pumping Rate L/sec - Input 180 270 180 All amounts in $USD Lithium grade mg/L - Input 87 244 300 14,485 LCE tonnes production per annum 5.3 5.3 5.3 Lithium component Li 2 CO 3 per Tonne Sale Price LCE per tonne – 3 cases: $9,500, $11,500, $14,500 Operating expenditure per tonne ($4,200) Operating life of Projects (8.3 yrs for Rincon, 19.7 yrs for Incahuasi, 30 years for Pular – last 10 years captured in terminal value in year 20) Taxation estimated at 25% of operating profits
Where we are now Next 6 – 12 months Beyond 2019 Secure funding partner to take 3 key projects (Rincon, LCE Production scoping Rincon project to production Pular, Incahuasi) in 9 Blend modelling Pular, mining leases (minas) of Incahuasi & Rincon Move to production - 20,840 ha evaporation pond, processing Resource drilling & analysis plant and roadway Incahuasi JORC2012 Lithium Secure pipeline / key carbonate (LCE) Commence Production well purchaser for resource Resources for Pular & construction Rincon projects totalling Refine extraction process to Key desired outcomes 239,000 tonnes – 63% increase margin and quality of Confirm resource and product resource Measured & Indicated for Rincon Realise value of project for Grade up to 313mg/l Resource statement for shareholders through Lithium Incahuasi increase in market Validate production process capitalisation
Share price is Share price is Current market cap projects valued at projects valued at $4m AUD $93m AUD $46m AUD Potential 3.3c share price 0.3c share price Potential 7.5c share price 12.5x multiple 25x multiple Apr 07 - Uranium Apr 07 - Uranium Sale completed Sale completed Then US$90/lb IPO holders – US$90/lb IPO holders – Jun 07– Uranium Jun 07– Uranium 1,445% ROI 1,445% ROI Price US$130/lb Price US$130/lb PNN has a track record for adapting to commodity cycle Sale of Uranium Project Sale of Uranium Project announced Uranium announced Uranium IPO Uranium IPO Uranium Price US$40/lb Price US$40/lb Price US$25/lb Price US$25/lb Dividend 5c per share Return on Dividend 5c per share Return on investment from IPO 425% investment from IPO 425%
Resources defined Extraction process analysis Production method testing Partner and funding to production Shareholder reward
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