Some observation from Goldman Sachs latest valuation of CXO from...

Some observation from Goldman Sachs latest valuation of CXO from 90c to 80c.

1. FY24 valuation scenarios shows 115% upside for EV/EBITDA @ 8.0x (industry norm) at $2,500 Spodumene 6% price. Right now Fast Market is showing actual price around $5,300 and forecast is trending upwards.

2. Lithium inventory for carbonate shows ~30 days of implied inventory available across EV supply chain. I think this is consistent with news shared in this forum. If anything we will see uptick in demand from China re-opening, inventory restocking.

3. GS continue to downplay CXO as developer in construction phase amongst Australian lithium projects. IMO we are in construction commissioning phase as well as Operating in my mind. These little errors from GS are quite blatant and irresponsible.

4. Investment Risk is Sell based on valuation methodology [EV multiple on EBITDA] primarily lower MRE, less than 20 year mine life, lower price estimate etc. Out of all projects in Australia CXO is the only one with NO Downside risk. Apart from higher price, exploration success and faster ramp up, I liked the comment on "government funding" and accretive M&A. Plus a few spell errors.

5. Finally Financial Summary. GS is forecasting 2024 EBITDA of A$250M AUD using $2,038 spodumene price, 145 kt production volume. If I use $5,000 price and volume of 190 kt, my estimate comes to ~A$800M EBITDA / $67M per month.

Final comment, GS valuation of CXO vs other majors is primarily focused on EV resource and metrics geared towards > 20 year mine life. Unless we increase our overall MRE, we will continue to be downplayed by GS for whatever reason.

Last week was great, we saw an upward trend and I hope we maintain that momentum next week. Lithium news is a daily feature in AFR which is great, first LTR now ESS. Our day will come.....for now hold long fellas!