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8horse

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04/03/24

15:41

Post #: 72735130
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Originally posted by GARETH78 ↑

I fail to see this $10.5 bn gap in valuation.

On a straight MC based on ordinary SOI yes a tad over $10bn, but you really need to then look at each companies balance sheet.

PLS likely cash on hand $2bn, LTR around a net $200m, though pretty much all committed.

So nearer $8bn enterprise differential, though PLS valuation is looking toppy. Todays candle not looking pretty.

But then are you actually comparing apples with apples. Both in WA, both hard rock deposits, and that is pretty much where it ends.

PLS has a clear path to 1 to 1.1mt per annum. P680 not fully commissioned and they hit annualised rate of 720k based on Dec qtr.

A clear path with hardly any execution risk with a very robust, you could even say lazy balance sheet.

They have exposure to downstream and mid product, have a business that is churning out lithia units very cheap with decent recoveries.

They have a good 4 years head start so there is going to be a huge difference and in all likelihood will be for considerable time. They have 2 plants that are lean mean money printing machines.

By contrast LTR needs to strengthen its balance sheet to get through ramp up. The mine plan itself is not comparable and the product spec well apart. Feel free to bang the 6% drum, but it comes at a cost.

The execution risk is still in front of it here and it's why the valuation is where it is.

There was a $6.65bn offer on the table here, even traded a tad over $7bn at one point.

At current price here lots of upside, but does not come without risk, namely execution.

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Here's my exercise posted last week,

LTR Price at posting: $1.32 Sentiment: Buy Disclosure: Held
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(20min delay)
Last 81.3¢		Change 0.028(3.50%)		Mkt cap ! $1.976B

Open	High	Low	Value	Volume
77.5¢	82.0¢	74.5¢	$10.47M	13.34M

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No.	Vol.	Price($)
34	351387	81.0¢

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Price($)	Vol.	No.
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No.	Vol.	Price($)
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36	381958	0.810
17	238916	0.805
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Price($)	Vol.	No.
0.820	302644	43
0.825	486767	28
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ASX Today, page-38505

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