Evening all,
Just an update to the above. The extraordinary disparity between valuations continues to grow. Revised comparison between LTR and AVZ as per the below.
Market CapitalisationLTR - A$216m (at 14c)
AVZ - A$106m (at 4.6c)
Est. cash position as at 30/6/19LTR - ~A$3.5m (CR required this quarter IMHO)
AVZ - ~A$8m (CR not required this quarter and project funding imminent IMO)
Enterprise Value (EV) based on the above est. cash positionsLTR - A$212m
AVZ - A$98m
(LTR now more than double the EV of AVZ
)
ResourcesLTR - 75mt @1.30% (62mt Measured and Indicated)
AVZ - 400mt @1.66% (269mt Measured & Indicated)
EV per contained Li resource ounceLTR - A$2.83 (US $1.98)
AVZ (65% share) - 37c (US $0.26c)
Strip ratioLTR - 8.24:1
AVZ - 0.7:1
Fair valuation for AVZ based on LTR's current valuation less 28.5%* discount rateLTR - current EV of A$2.83 per resource oz
AVZ - A$2.83 less 28.5% = $A2.02 per resource oz
260mt (AVZ 65% share of 400mt) x A$2.02 =
A$520m fair valuation.
Therefore AVZ currently trading at an 80-90% discount to it's peers i.e. post the 28.5% discount rate being applied.
Fair valuation for AVZ based on LTR trading at AVZ's current valuation of $98m less 28.5%* discount rateLTR - $98m EV = EV of A$1.31 per resource oz
AVZ - A$1.31 less 28.5% = $A0.94 per resource oz
260mt (AVZ 65% share of 400mt) x A$0.94 =
A$244m fair valuation.
Therefore even if LTR's SP retreated by 53% to $0.066 to match AVZ's current valuation of $98m, AVZ would still be trading at a 28%% discount to it's closest ASX listed peer i.e. post the 28.5% discount rate being applied.
*Discount rate of 15% for pre-feasibility stage projects (refer Figure 1 below) plus maximum 13.5% country risk applied (Africa is 10% - refer Figure 2) = 28.5%
View attachment 1652398View attachment 1652389Figure 2 (above): Discount rate risk for the various territories
Source:
http://minewiki.engineering.queensu.ca/mediawiki/index.php/Discount_rateLTR vs AVZ - non JORC compliant exploration projects Following my update yesterday, it was suggested that my resource estimate included only one of LTR's projects (Kathleen Valley). Therefore I am pleased to provide a brief comparison between LTR's Buldania exploration project and AVZ's Carriere' de l'Este.
Below are the drilling highlights for both projects thus far, and I ask you to be the judge as to which project is 'ok' or 'acceptable', and which is project a 'freak of nature' or as NF puts it 'one of nature's gifts'
Figure 3. LTR - Buldania Project exploration highlightsView attachment 1652629Figure 4a and 4b - Carriere' de l'Este exploration highlightsView attachment 1652638View attachment 1652644Finally, I added AVZ to the below spreadsheet (majority of data kindly put together by
@anatol) and would like to correct a statement that he recently made (in italics below) on the LTR thread.
Now Kathleen ValleyManono is the largest spodumene based hard rock resource afterand miles in front of the Big 4 in the world, and the resource remains open both along strike and at depth and offers outstanding potential for further growth by additional drilling.
View attachment 1652722As you can see from the above, AVZ's confirmed resource at Roche Dure (400mt at 1.65%) dwarfs most other hard rock projects throughout the world in terms of size, grade, strip ratio and quality (low deleterious elements). However when it comes to potential, AVZ's conceptual target of
1.6 billion tonnes at 1.5% (my estimate based on some detailed analysis) completely blows any comparison out of the water.
In terms of fair valuations, the market will eventually sort out the wheat from the chaff, and when it does... well I know where I'd prefer to park my money right now and for the
Li-ion battery boom that is about to launch into the stratosphere.
View attachment 1652701And when the exponential growth demands exponential supply of the Tier 1 quality type, the world will thank a fully developed and gorgeous angel who awaits up above (but see below) to fulfill unprecedented demand.
View attachment 1652710(image source: courtesy of @thabeatmakerz
@Twitter)
GLTA, be patient, ignore the daily noise and dare to
dream realise big.
Cheers
Elpha
