S&P Global Market Intelligence also forecasts a deficit of battery-grade lithium, or lithium carbonate, in coming years, which is expected to support prices above $US40,000 a tonne as demand outstrips supply. (AFR 16/05/2023)
When I plug US$40,000 per tonne for the 12,000kt plant, the valuation in 2025-2026 is $2.20 per share (assumption is dilution by 250 million shares to raise $150 million, plus pre pay, plus funds from 2kt operations to fund the expansion)
Assumed costs are $10,000 per tonne.
Short term (3-6 months) expected announcements:
1- Official start of commercial production (within AGY control)
2- Approvals to expand to 12kt (Out of AGY control, delayed, probably misunderstood, and underestimated bearucratic and political process - however recent visits and signs are encouraging. Political stability post election should also help)
3- Offtake agreement (Dependant on the above 2 points in my opinion, but there is a shortage, the demand is there, the high quality product is there, it just needs confirmation of ability to produce at nameplate and expansion beyond)
Then towards the end of the year,
4- the Resource Expansion (within AGY control, lack of experienced drill operators caused a delay, but based on my interactions, should be expected by the end of this year)
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