@MinerBrad Yes it is difficult to see how this valuation is sensible. There appear to be three parts to it:
#1 The valuations of many other lithium companies have been knocked so hard that investors might decide to switch which company they are backing and the exchange ratio they receive is not that different or even better to what it was 6, 9, 12 months ago. For example if you were to sell 4 DLI shares on the 6Jan close at 46c you would have got $1.84 and that wouldn't have quite bought you a single share in GL1 (which was $2.00 at the time). Now if you sold 4 DLI shares now at 26c you would have $1.04 and with that you would be able to buy almost 3 GL1 shares. While the price of DLI has been knocked down heaps, some other lithium companies have fallen even more potentially creating selling of DLI even although its fallen in price. The only real solution to this issue is a rising tide lifting all boats so there isn't a multitude of cheap lithium options to choose from.
#2 The Core Lithium effect. Core lithium was a widely held lithium company that was the poster child of developing smaller deposits. They have made some spectacular stuff-up's related to planning, designing for the environment and communication. I suspect that these stuff-up's are having a cascading effect to the owners of smaller to mid-sized lithium deposits. Some investors will have sold out of Core and also sold out of any other small deposit lithium company as their interpretation of the mess at Core was that small deposits don't work. Others will have read the smug comments from shareholders in larger deposits and believed it to be true that small can't work. From a financial and operational viewpoint a smaller deposit mined effectively can have excellent financial returns but good luck convincing investors of that who have made up their mind small doesn't work. My personal opinion is the situation at Core isn't as dire as is being made out to be so there is possible upside of they sort their s**t out.
#3 It may be just perception but it feels as if there's less promotion/frequency of info releases. May was quiet with one presentation announcement.
The gold resource could be worth a lot!!
We know the resource estimate is 412k oz at 4.1g/t. If it was all mineable and processed with 100% recoveries then 412k oz is around A$3,500/oz so the in-ground gold value is $1,442m but doesn't tell you how much it costs to mine and how much it costs to process or how much of that is either difficult or expensive to mine, or what's lost in recoveries. If it costs $500m to mine and process its high value. If it costs $1.5b to mine and process then there's no value. There may be pockets that are high value and other bits that are marginal. More information is needed to really estimate costs with even some accuracy.
In the cross section below the gold is deeper than the pegmatite so its unclear if the lithium creates a pit making the gold easy or the gold has enough value that it creates a pit and removes some lithium bearing pegmatite along the way (so the pegmatite has effectively a zero strip ratio!!). The release of more studies work will be needed to better understand this.
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