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Argosy Minerals Limited (ASX:AGY) is a company from the metals and mining industry based in Perth and engaged in the development of exploration projects for graphite, lithium, base metals, and other minerals across Australia, Namibia and Argentina. Currently, itâs primary focus lies in the flagship asset Rincon Lithium Project (with a current 77.55 interest) spanning 2,572 hectares across mining concessions situated in the world-renowned Lithium Triangle, Salar del Rincon, in Salta Province, Argentina.
Recently, Argosy Minerals announced an update on the further commercial development of the Rincon Lithium Project. As reported, the company has been advancing works for the next stage development approvals via submission of applications to the Salta Province Mines Department, currently targeting sanctions for an initial ~2000 tpa commercial operation module. Meanwhile, the regulatory works have been initiated to prepare permit applications for the full commercial scale of ~10,000 tpa project development and associated approvals.
The company has also confirmed progress in the process of Lithium carbonate product specification customer acceptance after the product test samples were provided to the desired potential Asian customers. This is because the fast-track development strategy adopted by Argosy enables a direct engagement with clients so as to conveniently provide LCE product samples from the Stage 1 industrial-scale pilot plant operations. As of late, the companyâs primary focus will remain on driving the strategic investment process to obtain the essential CAPEX finance aid for the beginning of full commercial-scale development of the project.
Prior to this, Argosy had released a quarterly activities report highlighting significant milestones during the period including the completion of the highly awaited Preliminary Economic Assessment (PEA) that provided formidable outcomes confirming the potential of the Rincon Lithium Project with a long-life and sustainable commercial scale operations with strong project economics.
The mine-life of ~ 16.5 year producing ~ 10,000tpa high-value Li2CO3 product has been estimated with pre-tax NPV of around ~USD 399 million and IRR of ~53%. In addition, the average annual pre-tax free cash flow during the commercial production is expected to be ~USD 74 million with an EBITDA margin of 61%.
Meanwhile, an upgraded JORC Code (2012) compliant Indicated Mineral Resource estimate, containing 245,120 tonnes of lithium carbonate to a vertical depth of 102.5m has been confirmed. As for the pond works, Argosy completed the construction of a combined total of around 38 hectares of lithium brine evaporation ponds, which are well operating and providing concentrated lithium brine to support the operating Stage 1 industrial-scale pilot plant.
For the quarter ended December 31st, 2018, the company had net cash and cash equivalents of AUD 2.69 million. There were significant cash outflows of AUD 2.32 million from operating activities comprising payments for development, exploration, evaluation, and corporate cost. There was no financing or investing activities undertaking during the period. Going forward, Argosy estimates cash outflows for the next quarter to be around AUD 2 million.
Argosy Minerals has a market cap of AUD 120.05 million with ~ 923.5 million outstanding shares. At the close of the trading session on ASX on February 28th, the AGY stockâs sell-off price stood at AUD 0.130 without any intra-day changes.
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