NPV vs Increasing Market Cap, page-13

If we are talking about mining stocks, "what's in the ground" is the lifeblood of your entire company. World class assets will always hold intrinsic value, particularly a deposit like Pilgangoora which hosts spodumene (lithium), the hottest commodity on the planet today, and for the forceable future. With juniors, there are many ways to make money, and the "icing on top" is if a major company, like a BHP Billiton or Rio Tinto comes along and takes you out for a hefty premium... The majors aren't interested in small-scale projects, they want the largest, highest grade, and most economical.

Further, the reason mining stocks are so inherently volatile in the first place is b/c of the insane amount of leverage that they offer an investor. Why else would one own gold mining stocks as opposed to physical bullion, for example. In the case of PLS, if the price of spodumene goes from $600/t to $750/t to $1,000/t, would you rather have less tonnes in the ground or many, many, many more tonnes? The market is forward looking indeed, and will re-rate a company for the reserves/resources it controls. That leverage is immeasurably magnified for a company like PLS that has the best undeveloped spodumene project on the planet of all the juniors out there.

Here is a recent interview with Rick Rule and Robert Friedland worth a listen.

Sprott Global

Robert Friedland has made billions in mining and his speciality has always been exploring, drilling, and proving out the largest mineral deposits in the world, wherever they may be. He's in Congo and South Africa right now focusing on copper, zinc, and PGMs. I think Rick Rule even once famously said, "World class deposits will ALWAYS find a way to fund themselves." In this interview, Robert talks about the Kamoa deposit and how it's so massive, high-grade, and economical that they can start up operations around 3-6 Mtpa, but later crank up production, potentially doubling it, as need be. To go from 3 Mtpa to 4 Mtpa would increase production by 33% for less than 10% increase in capital. A larger deposit gives the operator a lot more flexibility to adapt to prevailing market sentiment/conditions. You can see how the same would apply for a company like PLS.

Please don't lose sight, in a bull metal for metals, the type of "overnight" increases in free cash flow can add a tons of value for investors (i.e. much higher share price). For a scorching hot sector like lithium, size does and will matter! The bigger, the better.

That's why I'm long PLS.