A few assumptions in this including a much higher demand for lithium and subsequent price increase. Stage 2 and stage 3 total = 12ktpa (not including pilot plant, not including tanopah). Assuming a price of $15k per tonne $5k opex = $120M annually. 90% for AGY. Taxes and USD/AUD hedge cancel themselves out. So we end up with $108M = ~10.5 cents per share. P/E of 15 makes that $1.58.
Now i definitely would not invest based on that above 2 minute calculation, but if is definitely feasible that the SP could go up to $3. The price of lithium could actually be higher than that, opex could be less (currently they have mentioned $4.6k and i rounded up to 5k) as that doesn't include increased efficiency and potash sales which I think are likely to occur. Even at current lithium prices of $10kpt it still puts us at 80c at that P/E. ORE had a P/E of over 20 when there share price went over $7 (currently 12), so thats another factor. Who knows, we may even have 20ktpa in a few years. One thing I am more certain on is that without permits or funding the share price will not be $3.
All just my opinion and I am well aware there are holes in the above, but you get the idea and you asked the question.
AGY Price at posting:
9.1¢ Sentiment: Buy Disclosure: Held
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