Hey Whatsthetip…(love your posts by the way, always clear and methodical so please calibrate my comments if needed)
Heres my back of the napkin calcs (take it with a shovel of salt please)
DFS steady state production: 365ktpa DFS spod price assumption: $1587 DFS Average LoM EBITDA: $316MM US DFS Average ton spod margin 5.5/6%: $721 per ton AISC at steady state rate: $867 per ton Spot spod price $4257 per ton Spot spod price margin $3390 per ton Current annual EBIDTA at spot and steady state : $1.237B adjusted for 40% ownership $494 MM convert to AUD: $727 MM divide by Shares outstanding: 609MM EBITDA per share 1.12 AUD per share 30% tax and royalties 80 cents EPS Don’t want to go crazy and start putting PE assumptions but for giggles at an 8-10 PE we’re looking at $6.4-$8 per share
Obviously this is all dependent on them delivering the project and underpinned by Spod pricing as shown on the DFS sensitivity analysis but if you like me think the EV thematic is in its 1st innings then the macro should support the price staying strong for at least another 4/5 years. Regardless of how accurate the assumptions above are this is heavily discounted and that’s the takeaway from any investment decision (how much risk is priced in and I think this one is currently priced way off for a developer with a strong DFS, mid size asset, reasonably safe jurisdiction, offtake partner and some of the best leadership at that level.
A11 Price at posting:
47.0¢ Sentiment: Buy Disclosure: Held
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