OK, it now appears IGO's purchase involves equity participation in the downstream Kwinana plant. A valuation of A$8b for purely Spod processing plant would be quite something ... in terms of gauging current market value for similar concerns.
Especially as Dale Henderson reiterated at the recent IMARC Conference, that Pilbara Mineral's plan is to become one of the biggest Spod producers in the world.
ALB's purchase of Wodgina was US$1.2b for a 60% (controlling/premium) interest ... at a time the exchange rate was ~63c. They were required to build a 500ktpa Spod processing plant, so ALB's payment included their share of ~A$250m payment towards that. Implied Wodgina value is A$2.925b.
The value of PLS (even without AJM) must exceed A$3b based on the Wodgina sale. The PLS resource exceeded Wodgina at the time of the sale.
Certainly, Greenbushes is a freak resource. However the point of my final paragraph was to highlight (as Chris Ellison said a week ago), the Pilbara Spodumene resources have not been drilled at depth ... whereas Greenbushes has.
Note LTR's resource ... the prime grade resource is 500m underground. Also note the PLS/AJM boundary drill sections highlighted that the higher grade resource is found as drilling goes deeper. Given Lithium's natural vulnerability to degradation through atmospheric pressure, I would expect this to be the norm.
I also recall in the boom days of late 2017, former poster, Pokerface said on many occasions, he had been with Directors where they all mentioned that the Pilgangoora resource could prove to be anything.
In the past 18 months, Tesla's share price has rocketed from $175 to $3,208. From 1 bag to over 18 bags. This represents the fact that the EV/ESS disruption has now been franked.
Lithium Boom Phase 3 could be anything. We are limited by cost contribution to the overall battery pack but compensated by future production improvements and scaling. Certainly Roskill's pricing predictions of US$750 by 2023 and US$900 by 2024/25 look very possible. However they always moderate forecasts. They certainly never predicted prices to fall as low as they did. It follows they may be underestimating future price increases, as supply/demand dynamics change.Could PLS go from 1 bag to 18 bags in the future?
Yet only just over a month ago, JP Morgan reviewed their PLS target price downward to 26c.
After Tesla Battery Day on 23Sep20, Morgan Stanley put a "sell" on the entire Lithium Sector.
However, the best goes to our very own Macquarie Bank, for stating 7 months ago: "The Pilbara Minerals Ltd (ASX: PLS) share price was the best performer on the index last week with a 19.9% gain. This was despite there being no news out of the lithium miner. Some investors may believe its shares have bottomed after falling extremely heavily over the last 12 months. Even after this strong gain, Pilbara Minerals’ shares are down 70% over the period. One broker that isn’t convinced that now is the time to buy is Macquarie. Earlier this month it slapped an underperform rating and 10 cents price target on its shares."
(20min delay)