PLS chart, page-8638

Hi Everyone, here's my unsolicited 2c on what's going on at the minute...

Charts

Weekly view:

• Looks like a healthy retracement is over and a bit of sideways chop is on the menu for a week or so.

Monthly view:

• Same place on the RSI last run had another +240% increase to follow
• We're wayyyyyyyy below previous run in stochastic RSI - which leads me to believe there's still a lot of juice left in this run with the the super optimist case of $15 share price.

• The realist case in the short term is around the $7 mark I reckon.

Note:

• $15 @ current commodity prices and current production is fair value on a very conservative EBITDA/MC ratio of 6:1...
• More on that below.

Fundamentals

Spodumene Price

• All time high was broken on the lithium carbonate pricing
• BMX has sold 5,000t at $7,800 SC6% equivalent (new all time high for SC6%)

• Every reputable expert that is familiar with the lithium landscape is championing that prices will be "stronger for longer"
• Average price for the most recent quarter likely $5,000 USD or more
• Mines coming online are tiny compared to PLS (except for the likes of LTR which is like 2+yrs away and half the size of PLS)
• Demand is only tightening with more OEMs ramping up, there will be more all time highs to follow

PLS Production & Shipping

• FID complete for p680 with a slight nod to improve other plant in preparation for p1000
• p680 likely on track for mid next year
• p1000 likely to follow same time in 2024
• Looks like we have shipped 160kt SC6% equivalent this SEP quarter with 1x container not accounted for yet
• Sep qtr shipping is at a run rate of 640ktpa

Price x Production

• The maths is simple... for the Sep qtr we're looking very least $800M USD ($1.2B AUD)
• The current p580 annual run rate at $5,000usd/t is $2.9B USD ($4.3B AUD) per annum
• The p680 annual run rate at $5,000usd/t is $3.4B USD ($5.1B AUD) per annum
• The p1000 annual run rate at $5,000usd/t is $5B USD ($7.5B AUD) per annum

Valuation right now, near, and medium term

• You can see below where we should be right now with current pricing - approaching the $9 range on a conservative day with (i) 6:1 EBITDA:MC ratio (ii) conservative operating costs at $650usd/t, and (iii) a slightly lower exchange rate
• In the near term with p680 coming on line within 6-8 months, the valuation is well over $10 and with spodumene prices likely improving some more, theres no reason the SP wouldn't be around the $15 range
• In the medium term with p1000 in a bit over 18 months, i see us easily flirting with $20 (if SC6% prices stabilize around where we are now).
• PLS will be in the ASX 50 with all the indexes buying in. And likely improve to ASX top 20 bringing even more stability
• Do I even have to say it?..... guys......Dividends soon.... Everyone living off super will want PLS (or more) after the first dividend payment.
• REMINDER: I haven't prices in the obvious value that the following venture will bring: (1) POSCO JV will easily add $500M extra revenue at 30% ownership, (2) CALIX is Dale's baby, its likely to bring more value than POSCO, (3) with the cash on hand over the next 12 months liekly being in the $4B-$5B AUD range, there is likely M&A activity on the horizon, (4) Its currently exploration season, we could have another routine resource increase, and (5,6,7,8) I've probably forgotten a bunch of crap too.

Just look at how pretty this picture is

Anyway, DYOR and take care of yourselves.

Lots of love - Woly