Kidman Resources (KDR) released an integrated study for the Mt Holland mine and lithium concentrator and the Kwinana lithium hydroxide (LiOH) refinery (50:50 JV between KDR and SQM). The study outlined up to 47 years project life producing 45.3ktpa LiOH with upfront capex of US$601m and cash operating costs of US$5,409/t (per tonne LiOH). We place Mt Holland in the top three hard rock lithium projects globally given its scale, grade, geometry and low sovereign risk jurisdiction. Unfortunately, KDR has not had resolution to date for an exemption from claims relating to minimum expenditure obligations for tenements held by Kidman subsidiaries. The matter is currently with the Minister for Mines and Petroleum. Argonaut believes the Minister will ultimately grant the exemption which should result in a rerating of the stock. However, there is no definitive timeline on the Ministers pending decision. Argonaut downgrades KDR to a SPEC BUY from BUY pending an outcome on the minimum expenditure obligation claims.
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