I posted this back in
August -
Now, many companies out there are trading without having all of these boxes ticked, and trading at a pretty high multiple to its actual EV.
Guess which company has every box ticked? Firefinch.
Shovel ready
DFS done (~A$1b NPV at a US$666/tn spod)
At nameplate, producing 436k tonnes spod p.a.
23yr Mine Life
Average US$306/ton AISC
This led the fundies to put a target of...
Sprott's Target: $0.80 (today 08/12 $1.20)
Euroz Hartley and Petra Capital's Target: $1.03 (today 08/12 $1.65 Petra Capital)
Now this was calculated based off the Spodumene price of US$666/tn.
BUT, if you've been following the lithium market, you would have seen recently that PLS (Pilbara Minerals) held its inaugural spodumene concentrate auction where the winning bid was US$1,250/tn for spodumene, which meant that the winner paid a ~45% premium over what was at market, which clearly showed the demand for spodumene, and also slightly further downstream - lithium carbonate and hydroxide.
Goulamina is one the largest and highest grade hard rock lithium projects on the ASX, and they are targeting a way higher output (as compared to its peers) of 436,000 tpa of spod as opposed to the peer average of 375,000 tpa of spod.
With the current spot prices of spodumene of US$1,280/tn (today 08/12 US$2k+)
The NPV10 is closer to A$3b, with the annual EBITDA to be ~A$500m. Now when you compare its peers EV/EBITDA, you will see that there is even more upside.
The price action these last few weeks have been very very telling of people loading up as much as they can, because even before the demerger happens, there is consensus that fair value of FFX right now should really be between $2.50 to $3.00 when you consider peers like PLS ($2.38), CXO ($0.385) etc to add on the value of #goulamina to the SP. No wonder the volumes have been incredible!
JP Morgan is so bullish about the sector that it recently put out a 'Buy all the lithium miners' bulletin and have forecasted Spodumene prices to be > US$1,000/tn.
Let's not even get started on #morilathegorilla and the $A1b++ GOLD asset that we have!
As always, please DYOR, because this is not financial advice.
