Good News & Bad News, page-20715

If anyone is interested this is my breakdown of the Spodumene prices achieved since the September 2021 Quarter with estimates for the next few quarters.
What it shows is even if the next few BMX auction results drop to US$7000 the net cashflow will still be quite amazing.
I'm forecasting around AUD$2.3B net surplus cash for 2022/23 with average spodumene price achieved of US$5800/dmt and for 2023/24 net surplus cash of AUD$3.1B if the average Spodumene price achieved stays at around USD$6300/dmt
This also factors in higher production costs and higher CAPEX due to additional cost pressures.

Based on the current share price the market is valuing PLS with a Spodumene price of around US$1000/dmt and it does not take into account the likely AUD$5B+ surplus cash generated over the next 2 years or the impact of mid stream and down stream benefits.

So if you believe the long term Spodumene price will stay above US$1000/dmt and the next two years will generate significant net surplus cashflow PLS appears to be very under valued right now.
If the long term Spodumene price does drop below US$1000/dmt many new lithium mines will not survive or will struggle to get funding for development/expansion so if this does happen it will likely be short lived and higher prices should return fairly quickly.

This is my Spodumene price breakdown with forecasts for the next 3 quarters:

	Column 1	Column 2	Column 3	Column 4
0		BMX	Contract	Average
1		Auction	Sales	Sales
2	Quarterly	USD/dmt	USD/dmt	USD/dmt
3	Report	$	$	$
4	Sep-21	1,690	676	875
5	Dec-21	2,350	1,691	1,775
6	Mar-22	-	2,650	2,650
7	Jun-22	6,617	3,967	4,267
8	Sep-22	7,360	4,614	4,813
9	Dec-22	8,234	5,176	5,613
10	Mar-23	7,500	6,300	6,429
11	Jun-23	7,000	6,300	6,375