Winding up would be in the "fold" category. It can happen but I think the probability is very low. Do you think Anson winding up is a serious probability? I don't for the following reasons:
I see the current intrinsic value at $400-$500m based on the stage of development, ie waiting for funding certainty, which namely:
1. working to
update JORC,
2. polishing results incoming to confirm
outstanding purity of product which pays off for customers (see below),
3. discussions with Government agencies to fund/develop the strategic resource,
4. discussions with offtake partners who
need Lithium for their core business,
5. and who get an advantage from having that supply in the USA and
6. will find this quality hard to find anywhere else.
7. working to secure development funding; and
8. supportive local community.
What could cause this business to fail to the point of winding up?
A. Lower Lithium Prices. (Anson can make money at current prices given its cost advantages). Given the structural demand for Litithium from EV's, stationary storage, personal devices, military and the cost of production and purification of battery grade product, it is hard to see how the price can stay below the marginal cost of production. I think that is a less than 5% chance or as certain as anything based on conventional economics.
B. Failure to Secure Funding. Could be due to interest rates spike, failure to negotiate offtake agreements (eg holding out for a higher price), deep recession undermining EV uptake. These factors are temporary, not likely to lead to a permanent failure to secure funding. One thing that could be permanent loss of opportunity would be what we think we know about the company was not true. Lets say if the company and the relevant 3rd parties colluded to mis-state the JORC and test results. I put this chance at 0.01% given the names involved and what we know about the land from indpendent sources.
So in my crude, hacker analysis, there is c 95% chance of Anson securing funding. I think that would put the company valuation at something approaching the NPV of the Lithium Feasibility at a discount rate of say 15%. There are other resources and assets to consider. A valuation of $800-$1bn would not be crazy, say 80 cents/share.
Consider why the company has not yet signed offtake agreements. Could they be waiting for all the variables to come into the purple zone (go Oscar!), including Lithium market conditions, to optimise the outcome for Anson (and themselves, see my post yesterday about alignment).
Anson should sensible wait until the last moment before they need to plan a CR if the macro-environment is contributing increasing value to their offtake and funding efforts.
This is a pretty fun stock to own. Ok yes I love it
(20min delay)