Relative Valuation

Hi all,

Mostly I do not both commenting on uniformed opinion as it is for the most part like trying to argue with a piece of wood. Small time brokers and Investment banks (middle men) mostly fall into this category with a few exceptions.

When a large Bank in particular says A is better than B in stock analysis there should be some sort of basis to the opinion. For example an EV / Resource type analysis:



Another poster asked about NMT and GXY processing costs:

http://www.neometals.com.au/reports/667-MM11072016.pdf

Cash Operating Cost per tonne of Li2CO3 US$ 5,345 - so approximately AUD 7,126

In my opinion the we should see NMT and GXY lithium carbonate production at AUD 2,500 to AUD 3,500 more expensive than PLS.

Mica almost doubles lithium carbonate processing costs - this is real a problem for GXY and NMT. That being said the spot price for lithium carbonate in China is still much higher than AUD 7,296 and likely to remain so for the foreseeable future. So everyone will still do well.

Mt Marion and Mt Caitlin have had delays to starting, so I do not believe this warrants such a massive discount to PLS's valuation.

Why an analyst would state that a company that produces lithium carbonate at almost 2x the cost of PLS and is also being valued at 4.5x the EV / Resource is more attractive than PLS is just sloppy in my opinion.

If you believe that lithium prices will crash one day because for some reason all these billions being invested in EV factories and battery making was all a pipe dream then PLS should still survive at it is in the lowest part on the cost curve. Have previously posted on this several times.

Best of luck all,
Super Ninja