So what should be a reasonable value on LEL's lithium business....

So what should be a reasonable value on LEL's lithium business. Using resource size is a bit flawed in that hard rock producers generally can have higher output for a given resource size. So I would think using expected annual production with LOM is more reasonable. For LEL I would hope they can produce 15Ktpa of LCE.

Assume pricing is around $15 000 pt (Very low from most bearish analysts)
Cost say $6000 pt (Allkem equivalent)
Margin $9000 pt.

So annual cashflow is 9000 (margin) *15000 (production) = $135m. After tax $94.5m. a NPV of this should be around $1bn using 10% discount rate.

This is US$1bn. in AUD this is A$1.5bn.

The cost of putting up this plant needs to be considered. Lets say A$500m. So NPV after construction costs is A$1bn.

Again if we place no value on our A$100m graphite business and assume all of our A$56m EV is based on lithium it assumes the market is valuing this lithium project at 6% of its NPV or at a 94% discount. This is using very conservative lithium pricing assumptions in the NPV.

I would hope that if we get a DFS out for a 15ktpa plant that this discount reduces significantly.