Relative to its peers KNL is objectively undervalued. This is possibly attributed to the critical juncture they are currently in with Finance and Sojitz offtake expected this month. Failure to achieve these key milestones could result in the company been kaput. However I expect a significant rerate if finance is obtained.
Furthermore Sojitz inking a deal would be seen as strong validation of KNLs graphite for use in lithium-ion batteries. This would also strengthen the case for KNL's ramp-up in production from 40k tpa to 150k tpa.
To add some perspective here if KNL were trading a SYR ratios (EV to BFS NPV) it would be 85c for 40k tpa output and $1.90 for staged increase up to 150k tpa (assumes 70:30 debt to equity for Capex).
IMO KNL represents a strong speculative buy with massive upside potential. This all hinges on announcements expected this month.
GLTAH, IMHO, DYOR. r
KNL Price at posting:
22.0¢ Sentiment: Buy Disclosure: Held
