Thacker Pass is the Exception Not the Rule
Lithium clays not named Thacker Pass are dead. I'm calling it.
This is one exestential threat I'm taking off my wall of worry for the lithium market.
Thacker Pass
Thacker Pass got $2.2 billion with a B in 0% spread to long dated treasuries, which is a big gift from the government. General Motors also committed crazy amounts of cash in a crazy spot market that nobody thinks will happen again with other projects. Letters of credit, cash funding, equity.
Despite all of that every time I look at it I think there's really not much value there for equity holders.
I just don't think another lithium clay project is going to happen without similar massive subsidies, subsidies that simply aren't going to be there again.
Surge Battery Metals
It's in that context that I look at Surge Battery Metals PEA and I have to think spot lithium carbonate is $8,357.03 today and they used $24,000. How many spodumene projects have better modeled returns at equivalent prices, probably all of them.
When you look at these lithium clay deposits their opex is actually pretty reasonable. But it's the capex that's a killer. $5.3 billion with a B.
Ganfeng Sonora
I am betting that Ganfeng is now happy that Mexico nationalized the Sonora project so they didn't pour huge amounts of capex into a clay project that doesn't make sense in the new long term lithium price world.