Broad assessment of Lithium producers including PLS
From market index
Mon 15 May 23,11:55am (AEST)
https://www.marketindex.com.au/news/which-asx-lithium-stock-offers-the-best-value?src=search-all
To start the seriesoff, we’re comparing ASX-listed hard rock players that have anexisting Mineral Resource Estimate (MRE).
Which lithium stock offers the bestvalue?
The table puts into perspective how much investors are paying fora tonne of lithium based on the company's resource and marketcapitalisation.
X-Axis: How much you’re paying for a tonne of lithium based on the company’s market cap (aka market cap divided by resource)
Y-Axis: Lithium grade
Colour: Green (producer), blue (developer) and yellow (explorer)
Bubble size: Size of resource
The graphis for illustrative purposes only and should not be used asinvestment advice (Source: Market Index)
Readers should also note the following points.
What's included in the data: The data uses the latest MRE and only includes Measured and Indicated Resource
Converting to LCE: All resources are converted to lithium carbonate equivalent (LCE) via the British Geological Survey's conversion ratios
Ownership: If a company owns 50% of a project, its LCE resource is halved
What's not included: The data does not take into consideration other factors that influence project economics such as geographical location, production costs etc. This means the data is a good starting point for comparisons but does not capture the full picture
And this is the data in table format:
| Ticker | Company | Mkt Cap ($m) | Projects | Location | Status | MRE Date | Li20 | Mt LCE | (A$/t LCE) |
|---|
| 1 | CXO | Core Lithium | 2,110 | Finniss | Australia | Producer | 18/04/23 | 1.37 | 0.66 | 3210 |
|---|
| 2 | LLL | Leo Lithium | 631 | Goulamina | Mali | Development | 17/01/23 | 1.46 | 2.93 | 430 |
|---|
| 3 | PLS | Pilbara Minerals | 14,510 | Pilgangoora | Australia | Producer | 06/10/21 | 1.17 | 6.08 | 2385 |
|---|
| 4 | LTR | Liontown Resources | 6,600 | Kathleen Valley | Australia | Development | 01/04/21 | 1.38 | 4.42 | 1494 |
|---|
| 5 | ESS | Essential Minerals | 125 | Dome | Australia | Exploration | 20/12/22 | 1.23 | 0.26 | 478 |
|---|
| 6 | SYA | Sayona Mining | 1,960 | Moblan, NAL, Authier | Canada | Development | ~ | 1.16 | 1.89 | 1039 |
|---|
| 7 | EUR | European Lithium | 149 | Wolfsberg | Austria | Exploration | 01/12/21 | 1.03 | 0.25 | 601 |
|---|
| 8 | GL1 | Global Lithium | 457 | Manna, Marble Bar | Australia | Exploration | 15/12/22 | 1.02 | 0.56 | 813 |
|---|
| 9 | A11 | Atlantic Lithium | 377 | Ewoyaa | Ghana | Exploration | 01/02/23 | 1.27 | 0.88 | 429 |
|---|
| 10 | PLL | Piedmont Lithium | 367 | Quebec, Carolina | Canada, US | Development | ~ | 1.11 | 0.96 | 381 |
|---|
Producer Premium: Pilbara and Core Lithium
Pilbara Minerals and Core Lithium have the most expensive pricetags, at an average $2,798 a tonne. But they're also the only twoproducers in our data set.
Liontown is targeting its first production in mid-2024 andcurrently sits at $1,494 a tonne. Here are a few interestingobservations:
Liontown has a 4.4Mt LCE resource, which is second only to Pilbara Minerals (on our data set)
Liontown has de-risked several aspects of its project including financing and construction progressing to schedule
This might sound obvious but only current producers have been able to take advantage of sky high prices from last year/earlier this year
The Mali Discount: Leo Lithium
Firefinch (ASX:FFX) and Resolute Mining (ASX:RSG) are two gold miners located in Mali. They tend to trade at asubstantial discount relative to ASX-listed gold peers, largely dueto being located in a rather unappealing and high-risk jurisdiction.
Leo Lithium has also fallen victim to the Mali discount. But itsproject is on track to deliver its first spodumene by the secondquarter of 2024. It's also exploring direct shipping oreopportunities in the fourth quarter of 2023, for up to 90,000 tonnes.
Will the 'Mali discount' forever weigh on Leo Lithium's valuation?Or will the stock see some sort of re-rate when it hits productionstatus and/or begins to show positive cashflows?
A Lot of Projects: Piedmont Lithium
Piedmont has been a little difficult to calculate as the companyoperates for projects with various levels of ownership:
35% interest in Sayona's (ASX: SYA) NAL and Authier Projects
Option to earn 50% in Atlantic Lithium's (ASX: A11) Ewoyaa Project
100% ownership of the Tennessee Project
100% ownership of the Carolina Project
The data for Piedmont Lithium does not incorporate the potentialAtlantic Lithium ownership.
(20min delay)