EMF Future Market Cap, page-2

Suggest you take a look at the research reports on the investor's website, in particular the most recent one by WH Ireland. I don't know if those guys are trustworthy but they are certainly more trustworthy than the randoms on HC

In my view, the market cap should theoretically approach the NPV of the project (as both represent the present value of future cashflows) as they begin production. Before that, it is discounted because of all the risks and uncertainties around offtakes, permits and approvals, costs, pricing and financing. As those boxes are ticked off, theoretically the price rises towards the NPV. It won't be a straight line because there will be breakthroughs, setbacks and silences, which will cause confidence to bounce around, not to mention fluctuations in lithium demand forecasts and prices. You also have to allow for dilution because along the way they're gonna need money.

Taking all this into account, WH Ireland reckon the value TODAY is 62p (= A$1.08) being 40% (discount for risk) of EMH's share of the NPV. With CEV as a partner, the risk is significantly reduced and financing seems to be taken care of up to construction, so they've just upped their valuation from 20% to 40% of NPV.

In production they estimate annual profits of around A$250m which (my arithmetic now) should give a market cap of $2bn, or $13/share, using today's shares on issue. But there will be more dilution, say 2x, leading to a share price in production of about $6.50. That's my WAG (wild-assed guess) and it's the reason I'm here, coz it's 15 bags from 44c (yeehaa).

So, to answer your question, here's my view of the share price:

Year 1: Anything
Year 2: Anything
Year 3: Anything
Year 4 (production): $6.50
Year 5: Don't care, I'll be sailing away with my 15-bagger

Not advice and please DYOR.

Figaro