While this may have been asked facetiously by the mouse, to elicit wild responses, I'll answer it honestly.
It must be remembered that once we cede 24% of Dathcom to CATH, a 1$ valuation would be placing the project value at somewhere in the region of 7.5 billion AUD - roughly on par with PLS' current price as a producing, cashflow generating play in a buoyant lithium market. So that's a high hurdle to cross for an outfit at our stage of the development cycle.
In saying that, with the superior resource of Manono - once the project is more de-risked I could see these kind of valuations being reached, even prior to production. To reach 1$+ I would expect most if not all of the following milestones to have been ticked off:
- ML - BFS - Collab agreement - 10mpta throughput SS / DFS - SEZ - FID - EPC Vendor contracted - Mine construction commenced - Additional project equity secured from DRC government (up to +15%, to AVZ 66% holding of Dathcom) - Hydroxide scoping study (resulting in commencement of Hydroxide feasibility study) - PLS offtake - Additional tin offtake - Full project debt funding
Now, the way things are shaping up it seems though we may reach 1$ without having all the above, especially should the market buy into FTs vision for the DRC as a battery producer. However, I think for fair valuation of the project in the 6-8 billion AUD region or above, I would think almost or all of the above should be reached. Though who knows in the lithium space today, we may well shine and reach 1$ by end of Q1 2022. I would suggest that may be an overvaluation for our current place on the mining life cycle, though certainly wouldn't complain.
Anyway, that's my two cents Mousey ol' boy.
AVZ Price at posting:
60.0¢ Sentiment: Buy Disclosure: Held
