AGY Fundamentals 2021

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Jezzaaa

743 Posts.

1705

04/02/21

14:28

Post #: 50708725

Time for a new thread, and a new analysis with a lot of information suddenly being available.

The date is currently 4 February 2021. The Investor presentation outlines the following "endeavoured" events:

Construction of the stage 2 plant has commenced, Targetted operation date - 1 July 2022. This plant will generate about $33.8m of revenue per year.

Approval for stage 3 (10,000t p.a) - 30 September 2021

Tonopah Exploration - April / June 2021

Prerequisites for Stage 3 funding (word "prerequisite" is my interpreation, in my opinion this is why we are doing these activites)

Updated Jorc at Rincon: July-September 2021, targetted total range 507,000 - 724,000 tonnes.

Completion of Feasibility Study for Rincon: October-December 2021

Targetted funding solution for Stage 3 - January 2022

Now it's time to whip out the valuation analyis i did last year, but with this recently acquired information

My assumptions for lithium pricing are:
$13,000 USD for 2022; and
$15,000 USD for 2024.

Assumptions for Expenses:

Costs from JORC @ 10,000 tonnes ~ $4,650 per tonne
Assumption - @ 2,000 tonnes ~ $5,000 per tonne

Assumed PE Ratio - 15
The ASX bounces between PE valuation of PE10 to PE20. The average is 15.

Market Cap - Stocks in Float.
1.25b after the raise

If we can get a funding solution for Stage 3 around January 2022 as the timeline suggests, i would imagine by July 2024 it would be more than up and running (generous 2.5 year timeframe)

Column 1 Column 2 Column 3

1 Stage 2 Plant - July 2022 Stage 3 Plant - July 2024

2 Output Tonnes p.a 2,000 10,000

3 Gross Revenue $26,000,000 $150,000,000

4 Less (operating costs) ($10,000,000) ($46,450,000)

5 Profit $16,000,000 $103,550,000

6 (10% to puma) (1,600,000) ($10,355,000)

7 (less tax 25% in ARG) (3,600,000) ($23,298,750)

8 After Tax Profit in USD $10,800,000 $69,896,250

9 After Tax Profit in AUD (x1.31) $14,148,000 $91,564,087

10 PE Ratio 15 212,220,000 1,373,461,305 - 200m AUD needed to fund the S3 plant

11 divided by 1.25b shares divided by 1.25b shares

12

13 PE Ratio 15 16.97c $1.10

14 Present Value (minus 2% inflation and 5% cost of capital) = 7% p.a $1.10 Future value / (1 +0.07 rate) ^3.5 years
= 86.80c Present Value

15 + 20% bonus from Tonopah Prospects and future value. $1.04 Present Value w/ Tonopah Assumptions

	Column 1	Column 2	Column 3
1		Stage 2 Plant - July 2022	Stage 3 Plant - July 2024
2	Output Tonnes p.a	2,000	10,000
3	Gross Revenue	$26,000,000	$150,000,000
4	Less (operating costs)	($10,000,000)	($46,450,000)
5	Profit	$16,000,000	$103,550,000
6	(10% to puma)	(1,600,000)	($10,355,000)
7	(less tax 25% in ARG)	(3,600,000)	($23,298,750)
8	After Tax Profit in USD	$10,800,000	$69,896,250
9	After Tax Profit in AUD (x1.31)	$14,148,000	$91,564,087
10	PE Ratio 15	212,220,000	1,373,461,305 - 200m AUD needed to fund the S3 plant
11		divided by 1.25b shares	divided by 1.25b shares
12
13	PE Ratio 15	16.97c	$1.10
14	Present Value (minus 2% inflation and 5% cost of capital) = 7% p.a		$1.10 Future value / (1 +0.07 rate) ^3.5 years = 86.80c Present Value
15	+ 20% bonus from Tonopah Prospects and future value.		$1.04 Present Value w/ Tonopah Assumptions