not sure they will be that far apart. Noting that both are still to confirm numbers around future upgrades...
PLS was forecasting EBITDA avg 1st 5 yrs of $121 based on selling at USD $537, wuth 2.7payback on $234m capex, processing 2MT/pa. IRR 38%.
AJM was forecasting EBITDA avg 1st 5 yrs of $82m selling roughly same $USD as PLS on ~ $110m capex and 1.8yrs payback, processing 1.5MT/pa. IRR 58%.
My working assumption has been that AJM has never really bothered proving up a big ore reserve, they were more focused on mining, hence they are on track to beat PLS to the production punchline.
If you assume that with additional drilling, AJM can increase ore reserves, the fact their core operation has better capex/opex numbers than PLS (faster payback, higher IRR etc) puts them in the box seat.
Little brothers always strive to overtake their big brothers. Trust me I am a younger brother.
Don't be surprised if in 3 years PLS and AJM are level pegging (or certainly withing 10-15%) on their EBITDA/NPAT numbers.
The beauty of this is that every punter values them based on market cap to ore reserve, which is the wrong metric. All IMO. Disclosure I am loooooooooooooooooooong AJM.
AJM Price at posting:
25.5¢ Sentiment: Buy Disclosure: Held
