Ok so I have had an idea for a while to open source a bunch of research and collaboratively work with others to find stocks. I trade in and out of a bunch of the below stocks depending on their valuation compared to peers. I think everyone is coming to the realisation that there is going to be a major shortage of critical metals (lithium being one of them) and most of the lithium stocks will do very well. At any given time though some will be better value then others and its about selecting those stocks to ride the leverage. I do not want to turn this into an argument about how other stocks are rubbish, the purpose for posting here is to get the resident experts in AVZ to help keep the spreadsheet up to date with latest studies and JORC estimates so it can be compared to its peers, I think most lithium stocks are going to continue to do well. I intend to post a similar thread on some of the other lithium stocks I hold so if you wish to talk about those stocks please do so on those threads.
My notes on AVZ:
i) It is the only truly Tier 1 asset on the list, that cannot be disputed, the thing is a freak. Basically no overburden and very high grade.
ii) On a Total Lithium resource : Market Capitalisation it is very cheep, At the time of writing this post the cost of ownership $49.5/t of LCE in the ground
iii) Market Cap is not too far away from the Capex and the NPV:Capex ratio will be financeable.
Initially I stuck to spodumene hard rock deposits but I have since added 2x European Mica Deposits (I need to do more research on these but on paper they look ok). I'm yet to add the clay deposits or brines. But potentially those more familiar with the stocks could add them.
The philosophy is to imagine these mines in production as they are currently all in DFS/PFS/SS stage. In that scenario if they are doing a earn in whats the full earn in. They have all used similar pricing for their products however the devil is in the detail and not all NPV's are the same. What I have done is look at how much LCE (Lithium Carbonate Equivalent) each company has in JORC Resource (Row 10), How much LCE is recoverable in the current mine plan (Row 14) and then the NPV of the project (Row 21). I've then compared each of these metrics to the market capitalisation to see which stocks are cheep and expensive compared to one another. (rows 26:30). Every stock is a buy at the right price.
Below is a link for anyone to have a play with and include their own DD. I've kept the values in the columns C:L and then the source of each of those values in cells U:AE (this is important for transparency, Reference publicly available information where you can and keep).
https://docs.google.com/spreadsheets/d/1hnfM3dwXPStNb6x7aC8D4NA8G2JhS23amSL63orw9Y8/edit?usp=sharingObviously someone is going to go in there and destroy my sheet so I encourage you to make a copy and work locally and then message me to update the main one. It would be awesome if we could all have a play and work collaboratively.
This is just for fun and not financial advice. DYOR
* Identified Areas for improvement:
1) Add cash/debt position of each company so enterprise value can be used
2) Add in cost per unit of product and annual production of product to place them on a cost curve
3) Separate out vertically integrated vs stand alone NPV's For deposits include non lithium minerals (i.e; tin, tungsten, tantalum and include them on a LCE Equivalent basis) (if someone wants to collect the conversion is easy and can be done live using googlefinance formulas)
4) Manually calculate NPV's at the same commodity prices (right now use the lithium pricing to compare how optimistic the company is too its peers and adjust NPV as appropriate)
