Ann: Drilling Update - Reung Kiet Lithium Project, page-19

Using LPD's numbers would be a good enough comparison for now as our main peer that has a DFS. Assuming that PAM would have at least slightly lower costs since shorter shipping distances and in a low cost environment.

LPD

• Construction cost: US$139M
• Operating costs: All in sustaining cost per tonne: ASIC US$/t3,221

ASIC definition from internet: "All-in sustaining costs include adjusted operating costs and sustaining capital expenditure, corporate general and administrative expenses, exploration expense, reflecting the full cost of production from current operations."

If we are selling for $35k (USD) per tonne minus all the costs of production/operation it would be around $31,779 USD per tonne in profit.(note: Latest forecast from Macquarie is over $50k per tonne for lithium chemical for 2024 and 2025 when PAM will be in production)
That would mean

• 10,000tpa production: USD $317.79m profit (after all costs) or $254.23m after tax (20% tax)
• 20,000tpa production: USD $635.85m profit (after all costs) or $508.46m after tax (20% tax)

At 20,000tpa, we could pay back capital expenses (if $139m) in the first year, $75m money for expansions/big buffer. It leaves $294.46m back or $1.47 (USD) dividend per share in the first year of production. 100,000 shares = $147,000 dividends

At 20,000tpa production and 200m shares on issue. If the company keeps $75m from the second year of production for non operational stuff (e.g. expansion) that leaves $433.46m back as dividends or $2.17 per share. 100,000 shares = $217,000 dividends

If the long term worst case scenario price of lithium is USD $17k per tonne (always good to play with but unlikely at least before 2030)
That would mean

• 10,000tpa production: USD $137.79m profit (after all costs) or $110.23m after tax (20% tax)
• 20,000tpa production: USD $275.58m profit (after all costs) or $220.46 after tax (20% tax)

At 20,000tpa, we could pay back capital expenses (if $139m) in the first year, $75m money for expansions/big buffer. It leaves $6.5m back or 3 cents (USD) dividend per share in the first year of production. 100,000 shares = $3,000 dividends

At 20,000tpa production and 200m shares on issue. If the company keeps $75m from the second year of production for non operational stuff (e.g. expansion) that leaves $149.6m back as dividends or 75 cents (USD) dividend per share. 100,000 shares = $75,000 dividends

I think the price would probably not fall to $17k per tonne as it would cause many explorers to stop and many of the top half of the cost curve producers to cease operations. So there would be less supply than expected if prices fall.

CXO has a similar life of mine and PAM's revenue would be double (if profit more than double) theirs at 20,000tpa so we should have a market cap at least the same or up to double theirs once in production. Noting CXO have over 1.7billion shares on issue which is a big difference from PAM.