Biddle hits the road to sell plans for a bitumen behemoth
The Pilbara Minerals founder plans to do it all again. And Liontown’s new MD is embarking on a roadshow of his own to explain the key points of difference around his company’s big WA lithium project.
14th May 2021
It is almost six years since Neil Biddle hit the Eastern States on a roadshow for a then-obscure little thing called Pilbara Minerals.
Pilbara (PLS) was trading at 5c a share at the time for a market cap of $32 million and it has to be said that Biddle got a lot of confused looks from investors at the June 2015 investor lunches in Brisbane, Sydney and Melbourne.
Pegmatites? Spodumene? Lithium? Electric vehicle revolution? What was he on about? Pass the bottle.
The Resources Rising Stars investor lunch series as it was, proved to be a turning point, as much for Pilbara as it was for general investors on what was coming in the lithium space.
Six years on and Pilbara now has a $3.4 billion market cap after the rapid development of its ever- expanding Pilgangoora lithium project (a name no one could pronounce or remember back in 2015).
Biddle - a dyed-in-the-wool geologist - moved on from Pilbara when the not-so-fun part of having to build Pilgangoora dawned, allowing him time since to come up with another opportunity that, like lithium back in 2015, will require some education of the market.
This time it is torbanite, a type of oil shale. Everything that needs to be known about torbanite will be covered by Biddle next week as his Greenvale Mining (GRV) goes on tour of the Eastern States in the latest RRS investor lunch series.
Greenvale’s Alpha torbanite project in central Queensland is fast being worked up by the $84m company (21.5c) as a business pitched to the booming infrastructure spend in Queensland ($20 billion) and elsewhere, all aimed at stimulating economies in the wake of COVID.
How so? Turns out that after torbanite is cooked in a retort, it is a high-yielding source of high-grade bitumen, light crude oil (used to make bitumen sprayable), and spent carbon (it can go into the metallurgical coal filler market or the high-end activated carbon market).
It seems that the bitumen market is tightening up because of the infrastructure spend, not only in Australia but SE Asia generally.
There’s a shortage of bitumen coming into Australia, with the local price rising by about $100/t to $600/t. Almost half of the imported bitumen comes from our friends in China, and the rest from SE Asian refineries.
So the stuff has travelled a long way before it gets used on Australian roads. Greenvale is out to become a local supplier.
To that end it is just finishing off an 85-hole resource definition drilling program at Alpha, with the core being delivered to a lab in Brisbane to undergo a retort program to confirm a processing route and the economics of it all.
No scoping-type figures yet but it can be said that the project is not resource-constrained. An initial $100m-plus gross revenue business would be seem to be in the offing.
Confirmation of all that is to come. But given Greenvale’s $84m market cap, it is kind of interesting.
Having said that, Biddle also has Greenvale in the thick of things in the exciting East Tennant province in the Northern Territory.
It is where government-funded work has confirmed that yes indeed, it is an exciting new frontier for big IOCG-type copper gold discoveries. Greenvale has done all the pre-drill work that needs to be done to hit targets on its ground hard, starting in July.
The way these things work, just one decent hit by Greenvale or others in the province will fire things up like no tomorrow. But if it all fizzes, at least Greenvale will have its bitumen business to fall back on.
Tony Ottaviano has had his feet under the desk as Liontown’s (LTR) managing director since May 5 and has been itching to get out and about with his plans to get the company’s Kathleen Valley lithium project in WA into production.
It is a good time to be telling a lithium story, with the price for spodumene concentrates (6% lithium) just about doubling in the last six months to $US675/t, and with the market staring at a severe supply deficit around 2025, the time KV is aiming to come into production.
A mechanical engineer by training, Ottaviano joined Liontown after 18 years with BHP, mostly in the iron ore division, but across the spectrum, including a deep involvement with BHP’s aborted bid for Rio Tinto way back when.
So it is a sure bet he did a deep due diligence of Liontown and KV before jumping ship to try his hand at running an ASX company. And in conducting that DD, Ottaviano would have had the benefit of reading up on the mistakes of WA’s first wave of hard-rock lithium projects.
And to his comfort, he would have found Liontown too had taken those lessons on board, first in a pre-feasibility study, and what is to come in the definitive feasibility study due for release in the December quarter.
Stripped back, KV will benefit from to its decision to go with an underground operation to reduce mining dilution and to access the highest-grade material first up. It will also benefit from its decision to use whole-of-ore processing (SAG mill and flotation) rather than high-pressure grinding and dense media separation that caused headaches in the first wave developments.
Ottaviano is not sure that the market is on to just what a difference it will all make at KV. So he is off on a (virtual) roadshow to the Eastern States next week to alert investors to the story, as well as introducing himself to the broader market after being tucked away inside BHP for all those years.
It’s a good idea to get on the front foot as Liontown is fast approaching the finance and build stage at KV - one of the biggest independent lithium projects in the world - at a time when there are growing concerns that the EV and renewable energy storage revolution is heading for a battery materials supply crisis.
Once the DFS lands, Liontown will be looking to make a final investment decision by the end of the March quarter next year.
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