That was a bit confusing. Pular valuation exercise:First stage -...

That was a bit confusing. Pular valuation exercise:

First stage - PNN retains 70% while HengLi acquires 30%. I couldn't work out the cost of plant setup, equipment, chemical imports and 100tpa LCE production by HengLi that earns them the 30%.

So working backwards from the second stage, they invest AUD$7.5M and achieve 1,000tpa LCE to earn an extra 45%. That puts the value of the project at AUD$16.7M.

First stage investment is c. AUD$5M.

I excluded the revenue from LCE production in both stages for simplicity.

While the JV dilution appears excessive to me, I guess the positive will be that 25% is the floor for the life of the project (PNN fre-carried for project life) and any further ramp up in production is icing on the cake for PNN.

Let's see what happens with Rincon and Incahuasi. Nothing to lose. One of three Lithium projects at advanced stage so MCAP needs some catching up to do? Let's not even consider other projects yet.


Disclaimer - Not a recommendation to buy or sell. I could have understated or overstated the facts.