A little off topic but a shorthanded version. 3bn current market...

A little off topic but a shorthanded version.

3bn current market cap would mean future cashflows of around 150m-300aud P/A. (PE or 10/20).
Given they are in construction FCF model no longer applicable with % applied. Once in production you should be 100% of you're PFS/BFS NPV and will flick to being valued on PE valuation with consideration to growth and future profits.

From memory they done 70000T of spodumene last quarter. which is annualised run rate of 280kt P/A through their PLS project (pilg). Unit cash cost was $350/t. If long term spodumene forcasting comes to fruition which is the 600-700/t mark we'll use 650/t.

Meaning at 280kT they generate 84M USD. I also recalled that they we're possible expanding to 400kT at pilg alone. If you add in the AJM production profile you might land close to 150-200M AUD profit P/A achievable. Might need to deduct some factors from there for debt repayments from there etc etc etc.

What needs to happen is spodumene price to increase, increase output from altura project and pilg project and lower the AISC, repay the debt. The market, IMV has loosely valued PLS to achieve these sort of figures and that sort of long term spodumene price over the coming years.

Would i invest. No, because their reliant on increased pricing the support current MC IMV which isn't in their control meaning if pricing stays this low they will be underwater regardless how much spod they pushout. They're also could be premium in the pricing for factoring in a situation whereby PLS moves to down-stream processing.

This argument for PLS is similar to LYC. Valued at 2.8bn but not making a profit, but the valuation is there because the market believes they will and there is also an element of having a large portion of market supply. I would not touch PLS or LYC because my personal style because i don't think there's alot of upside, and the perception of a large MC big awesome aussie miner gives people and investors across the board a false sense of security that their investment is awesome. People at AJM thought the same and they went to the wall, no reason PLS can't either TBH.

Recommend we move discussion to those threads if required.

*disclosure hold lithium stocks - do not hold PLS (haven't for a while now)

SF2TH