What might be the reason for explosive SP increase?, page-184

I never did any downramping at ADN - I simply gave my opinion backed up by facts and figures from ADN's own published PFS. As it turns out, I was correct and ADN has shed more than 50% of it's value since my original posts.

Re LTR, its current market value (approx. $3 billion) is more than double the Net Present Value of the Kathleen Valley Project as per LTR's published PFS (Base case NPV of Project is $1.1 billion in the PFS). So the market has run well ahead of the base Project in terms of valuation.

So lets assume we go with the integrated refinery project. The scoping study for the LHM Project produces the highest NPV, with a NPV of $4.8 billion (base case). So LTR is currently trading at 3/4.8 equals 62% of the NPV of its fully integrated most valuable scenario. Normally co's trade at 20-40% of the NPV of their project (as per their published PFS or DFS), and then as they progressively de risk the Project their market cap moves towards the NPV of the project. LTR is already trading at 200%+ of the NPV of the base Kathleen Valley Project and at 62% of the NPV of their most optimistic scenario (the LHM fully integrated Refinery option).

The LHM option requires $1.10 billion of capex to build the Project - now whilst this capex is already accounted for in the Project NPV, LTR will need to raise at least some of these funds (it should be able to borrow the balance), leading to significant dilution.

As I say, I like LTR, the Project and management are excellent, however I just think the share price has run ahead of itself and IMO the risk/reward is now decidedly unattractive.

GLTA & DYOR