The current ownership of Goulamina is LLL and Ganfeng, 50% each; Mali government will have a 10% free carry interest, so LLL and Ganfeng each will have 45% of the Goulamina project. Mali government has an option to buy additional 10% of the Goulamina project at fair market value, if exercised, the consideration will be funded by LLL and Ganfeng, to be repaid via tax credits/offsets, then LLL and Ganfeng each would have 40% of the Goulamina project if the option were exercised.
Bear in mind, Mali government will be just a passive partner, LLL will still have the marketing right for the 50% of the stage 2 production.
Currently scoping study for the stage 2 is 80% completed, as resource to be further growth, stage 2 production is very likely to increase to 1 million tons SC6, imo.
I guess long term spodumene concentrate (6%) price would be around US$2,000/ton which implies lithium carbonate price at around CNY 150,000/ton (75% off the recent peak).
Here's my exercise, at the least ownership of 40%, LLL would generate annual net profit after tax of $500m to $700m for over 20 years. Also, Mali government actually would receive much more income as combined profit share, royalties and income tax, plus other indirect taxes. It's obvious, the Mali government will strongly support the project and future monetary benefits from the Goulamina JV is Massive, likely over US$10b for Mali.
Then just have a look at another ASX Mali gold producer, RSG, current gold price at historical high level, their forward PE is around 8-10, their valuation is barely discounted for Mali risk.
If LLL is progressing as planned, forwarded PE would be around 3 for 2024 due to first production, then would drop to merely 1.
View attachment 5244706High risk/high return.
All imo.
(20min delay)