Ords posted this research update with a new PT of .75c on the...

Ords posted this research update with a new PT of .75c on the back of finance approvals et al. They are very bullish on INR with a Speculative Buy Rating... guess it all helps.


Happy Days INR is rallying hard, and we suspect momentum could be maintained amidst a tight lithium market and near-term catalysts (strategic + funding stack). There is more juice in our conservative valuation, particularly with an increase in scale. We remain bullish on the thematic and believe INR remains uniquely positioned. We make several model changes which sees a 20¢ lift in our valuation to A$0.75/sh. Reiterate our Spec’ Buy.

Lithium Running Hard / Remain Bullish ▪ Lithium’s price surge continues and is up ~150% YTD. Its rally could continue as inventory levels appear low (Fig 6) with peak seasonal demand is fast approaching (Fig 7). But we do flag risk from ongoing semiconductor chip shortages.▪ We have revised our S/D model and commodity outlook. We remain bullish on the medium market balance, expecting the price cycle to peak in CY23 as deficits approach ~20% consumption.▪ We have capitulated on our forecast methodology and now adopt incentive price analysis (previously marginal cost). We increase our lithium hydroxide forecast by +24% to US$13/kg.Valuation Upside / Blue Sky ▪

INR has rallied +135% YTD as sector inflows surge (Fig 11).▪ In our view INR remains unique and strategically positioned. All the key parts are coming together with several upcoming catalysts including the strategic partner and funding solution/stack later this month.▪
We believe INR has further room to re-rate, noting: DFS valuation of US$1.2bn (86¢/sh); spot prices imply $1.20/sh; share price currently implying LiOH of $11/kg (-46% below spot).▪ We also reiterate our Blue-Sky scenario if the project is scaled up beyondthe 2.5mtpa plant capacity.Raise Target Price 20¢ to $0.75/sh – Retain Spec Buy ▪

We make several model changes which results in a material increase in our target price of +20¢ to A$0.75/sh. While the TSR now stands at +14% we retain our Speculative Buy.▪
Our valuation is based on a DCF using an 8% WACC, and conservative development assumptions (higher capex, slower ramp up) at a long-term AUD of 0.70 and boric acid price of $700/t.▪ INR has cash of $89m and no debt.

A funding solution for the US$785m capital cost should be released in the coming weeks/months.▪

They also highlight that permit delays may push out by some additional weeks but that the company is confident it can meet all obligations in that space.