@Stephan90, I think this is spot on, so long as price forecasts beyond 23 remain subdued you can't really expect much of a valuation uplift going forward. Doubling of production and halving of realised price is what is being forecast.
As far as comparisons against PLS goes, a few old-timers here are now saying they are not comparable and I tend to agree to a certain extent.
Just looking at September Qtr results.
Pls cash generation usd 412m at 0.65fx (inclusive of lc and capex) end of period cash just shy of usd 1bn. At the same runrate pls is likely to have north of usd2.2bn by 30 jun 23.
Ake cash generation usd81m with same adjustments, end of period cash just shy of usd 500m.
Notwithstanding the catlin issues which should resolve by march qtr 23, there is a huge gap in cash generation.
Given time value of money and more certainty of cash today vs cash beyond 23 (pricing and production variable) the valuation gap vs pls is justified and should probably be higher.
Realistically pls could get to 1mt long before ake completes it's suite of expansions to get anywhere close to the same in LCE terms.
Pls expansions are far less capital intensive and much quicker so from a return perspective they are superior. As it currently stands there isn't a huge difference in margin being achieved whether you produce carbonate as ake does or spodumene as pls does. This won't always be the case but for the moment spod is a much quicker and simpler way to generate cashflow.
The one interesting point to note however is that Catlin spod pricing is much better than pls is achieving.
Catlin usd 5,028/t cif for 5.4% grade
Pls usd usd 4,266 cif for 5.3% grade material inclusive of bmx spot sales. Excluding spot sales and adjusting for grade differential it is probably a usd1k/t cif price difference which is pretty substantial.
Well done to ake on that front.
Aimo
AKE Price at posting:
$14.95 Sentiment: None Disclosure: Held
