2020 LiO 6% concentrate production target 240,000. Assuming lower bookend of current offtake sale price of US$680 per tonne and target US$400 per tonne cost, this equates to 2020 operating cashflow of AUD $97 million. Current EV is AUD $280m. Should operating cost targets be achieved and should the 240,000 times tonnes per annum be achieved this mine is going to spin out A LOT of cash over the next 8 years.
If one takes a more optimistic price per tonne (in a few years) of $850 per tonne, this mine spins out operating cashflow of AUD $150m per annum.
of course head office and exploration costs and interest on debt will dilute the end cash flows, but all in all this looks quite promising to me.
A40 Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
