Sayona Mining

sayonamining.com.au/wp/wp-content/uploads/...ment-Research.pdf

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VALUATION
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We have updated our Sayona valuation, again using the same “sum of the parts” method  
as used in our initiation report (Table 8).
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In the update, we have updated the costs and spodumene prices to reflect those as
used in the updated PFS, however again we have used a conceptual operation, with six
years of mining at 700,000tpa followed by 9 years of mining at 1,400,000tpa, for a total
of 16,800,000 tonnes being mined.
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This assumes that all inferred mineralisation is upgraded, and a high Resource to Reserve  
conversion - we have also used a higher strip ratio than previous following on from the
results of the upgraded PFS.
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The economics are reasonable sensitive to strip ratio - an increase in 1 (e.g. from 6:1 to
7:1 waste:ore results in an additional 7.5 tonnes of waste needing to be mined for each
tonne of concentrate, resulting in an additional cost of C$23/tonne of concentrate.
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We note that in our previous valuation we used a higher spodumene concentrate price
of US$550/tonne than the US$515/tonne as used by Sayona; in the current valuation we
have used the same figure of US$614/tonne, therefore our price increase is C$83/tonne,
broadly similar to the cost increases (C$60/tonne in the upgraded PFS + ~C$25/tonne to
allow for our higher strip ratio).
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As such our post-tax, funded Authier valuation has remained largely similar to that of our
initiation un-risked valuation of A$226 million.
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We have increased our Pilbara lithium valuation at A$15 million, to reflect the general
increase in value of lithium stocks over the past six months, and the addition of Deep
Well, reflecting the recent interest in the Pilbara conglomerate gold story.
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Again we have used a 40% equity, 60% debt funding scenario, with equity raised at
A$0.06/share (previously A$0.05/share); our previous model also assumed pre DFS
funding of A$5 million at A$0.02/share, where in fact this was at A$0.01/share.
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This results in a diluted share base of 1.9 billion shares.

Exploration:
This is the key risk for any exploration company, with survival largely based
on the results of exploration. This is largely mitigated in the case of Sayona in having
the near development Authier Project, and also given the results of work to date on the
Western Australian projects.

Permitting:
This is a risk for any near development project, and for Sayona is applicable
at Authier; our view however is that the risk here should not be failure to permit, but time
frames being longer than expected.

Funding:
This is a perennial issue for junior explorers and developers, with Sayona
also facing the prospect of having to look to fund development of Authier (with project
funding markets currently being tight) - this however should be somewhat mitigated
by the expected relatively low up-front capital for Authier. On the other hand, with the
recent raising, the Company is well funded for the DFS.

Markets:
Although relatively buoyant at the moment, markets can turn on a dime and
funding for juniors can dry up very quickly.

Sovereign:
Both Quebec and Western Australia are well developed and regarding mining
jurisdictions - Western Australia ranked 3rd globally in the 2016 Fraser Institute survey,
with Quebec 6th - Western Australia was the highest ranked Australian state and Quebec
the third ranked Canadian province.

weiterhin keiner dabei?

Shareholder Update 11/01/2018 Sayona Mining Limited (ASX: SYA) ("Sayona" or the "Company") is pleased to provide shareholders an update of activities planned for 2018. In 2017, the Company made substantial progress advancing Authier to the Definitive Feasibility Study (“DFS”) stage. This included completing two resource and reserve upgrades, optimisation of the process flow sheet, completion of environmental field studies, advancing mining lease permitting, and completion of an Optimised Pre- Feasibility Study (“PFS”). The PFS demonstrated the opportunity to create substantial long-term sustainable shareholder value at a low capital cost - a pre-tax NPV8 of C$221m (AUD$227m) based on a capital expenditure of C$65 million. In Western Australia, the Company has built a substantial portfolio of lithium prospective tenements totalling 2,000 km2, in the spodumene-rich, Pilgangoora district. A new pegmatite field containing spodumene was discovered at Mallina and will be the primary focus of exploration activities during 2018. The lithium market ended 2017 very strongly, with demand driving robust spot and contract pricing. Galaxy Lithium announced extensions to contracts with Chinese buyers for the next five years at pricing for 2018 at similar pricing to the 2017 contracts (between US$840 to US$905/t for 6% Li20 concentrate). Authier lithium project, Canada The Company’s primary objective in early 2018 is to complete the studies required to commence the development of the project. Authier is a near-term development project and cash-flow generation opportunity. The Company believes it will create significant share value-uplift potential for shareholders as the project is advanced towards development. The Phase 3 drilling program will re-commence in the second week of January. The objective of the drilling is to expand and optimise, the resource and reserve position for incorporation into the DFS. The program will target extending Authier mineralisation in the east and west at shallow levels, and at Authier North where a small JORC Mineral Resources was defined as part of the Optimised Pre-Feasibility Study A pilot metallurgy program will commence in January utilising more than five tonnes of diamond drill core. Data from the pilot program will be incorporated into the engineering and design of the process plant, and concentrate produced will be used for marketing and downstream testing purposes. BBA is making excellent progress on the DFS which is expected to be completed in the second quarter 2018. BBA have extensive experience in the Canadian mining industry and have been actively involved in Feasibility Studies for Quebec lithium projects including, Nemaska and the North American Lithium project. All of the base-line environmental field studies have been completed. Permitting activities including social and first nation consultation are underway. On completion of the DFS, the Company will lodge the final documentation required to secure a Mining Lease. Subject to the outcomes of the permitting and financing, the Company envisages commencing construction in the second half of 2018 and first production late in 2019. The Company is actively engaged with a number of potential off-takers and financiers whilst also receiving strong interest from Chinese concentrate converters interested in purchasing Authier concentrates or value-adding in country. The Company recently announced a Memorandum of Understanding (“MOU”) with Huan Changuan Lico Co Ltd, a subsidiary of Fortune 500 Company, Minmetals Group. The MOU paves the way for advancing discussions to facilitate a development alliance exploring marketing, technical and financial opportunities for the Authier project, including, purchasing up to 100,000 tonnes of spodumene concentrate per annum. In addition, the Company is focused on financing Authier in way that minimises dilution to shareholders. Western Australian Lithium The Company has built a large portfolio of lithium tenements in Western Australia and is excited by the prospectivity of the Mallina project where new spodumene bearing pegmatites have been recently identified. Further exploration and drilling is required to better understand the mineralisation within the complex rare metal pegmatites. Mallina is a very prospective province in close proximity to other major spodumene deposits including Pilgangoora and Wodgina. Growth Opportunities The Company is examining a number of new growth opportunities in the lithium sector which it believes have the potential to enhance the value of the Company. These include new projects and value-adding of existing projects including the Authier downstream project which has demonstrated very robust economics. We believe 2018 will be a transformative year for Sayona as is evolves from the exploration-stage to the development-stage at Authier. The Company will also continue to develop a pipeline of new opportunities by leveraging its lithium exploration and development experience, and expertise.

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