Its all about the 4mtpa scenario for me mate.
4mtpa = conservative 700,000t of 6% spodumene
Cash costs = 300t USD (potentially lower under 4mtpa scenario factoring in BOD savings targets)
Sales Price = 1,000t USD (potentially higher with latest pricing trends eg: ORE + GXY)
Margin = 700t USD
Annual Cash Profit = $490,000,000 USD
FX = 75c AUD
Annual Cash Profit = $650,000,000 AUD
P/E Multiple = 7 (very conservative for 20 yr LOM in bull market)
Forward Valuation = 4.55 billion AUD
Shares on Issue = 235m
SP Valuation at 100% = $19.36
BGS likely ownership of asset after funding of plant = 40% under a Randgold/Anglo/Mali Gov scenario
BGS SP Valuation =$7.75
This is a very conservative valuation at probably year 2 of our operation... using conservative sales price, costings and PE multiple, and the biggest thing, doesn't factor in us doing a carbonate or hydroxide operation which has even high margins...
Doesn't factor in the gold asset either....
so can easily be a $10 stock in a couple years. Mark this post and see where I land by end of 2019. Whilst this is not advice, I suspect I will be very close.
Compare that to 60c and I just see upside and an extremely strong risk/reward scenario.
BGS will likely be a producer in 2018 (gold) and producer in 2019 (lithium)...
Boy.
