Given the current overall market circumstances for EV battery materials, it would not be reflective of an assets true value to calculate it using a method of discounting future cashflows.
The current Project Value of AJM's Pilgangoora asset is over $A500m. Perhaps a little high next to PLS's $A950m but there would be a lot of industry players who would be very interested in picking up AJM Pilgangoora for more than $A300m. I doubt PLS would be one of them given covenants with the newly arranged finance.
When I read the TH on Monday, I felt this was merely the capitalisation of upcoming commitments giving AJM (maybe 9 months) more breathing space. However the 60% recovery rate resonates with me. This plant needs money spent on it, that AJM just doesn't have. With a Plant Contractor taking legal action for recovery of an outstanding debt recently, that emits an industry message.
A great product but this business needs fresh air that only someone with deep pockets can ventilate. Too much for PLS and too little for Twiggy. CE must be drooling. That's not screeching or squawking from the seagulls, its laughing.
Good luck AJMers, hopefully this is a refinancing.
AJM Price at posting:
7.0¢ Sentiment: None Disclosure: Not Held
