I think this was pretty much a given, so probably not much to bring about a re-rate as such... I suspect it will slowly drop back again too, despite today's gains. I just love that they keep getting the job and dripping positive news onto the market with reasonable frequency.
This is the first mention that I recall of customer enquiries though, so that's kind of exciting... but we still don't have much of anything to go off in terms of putting a value on battery sales... no cost or sales values etc.
I believe a completed feasibility on the Daejon vanadium project and/or offtake agreements (in particular, if they are to secure supply for Korea's domestic market) will be the main driver of any re-rate in the coming months. Batteries sales cannot in my mind be significant for the company until a) VRFB demand really takes off (how long until will it take the market to develop???) and b) it can achieve vertical integration by manufacturing it's own electrolyte (which requires a mine etc...).
My main reservation with POW was the relatively lower grade of vanadium ore (0.3%), although POW reckons that China upgrades this type of ore on average by 300% and I found a couple of other black shale projects with feasibilities that were fairly positive. In particular, both projects had very reasonable initial capex costs and solid NPV's with only a vanadium pentoxide product. POW will also be looking at having uranium credits in their feasibility study. Obviously electrolyte production, which is a much higher value product, and battery sales could also factor in down the track.
I note that these two feasibilities do not include any uranium credita. Uranium processing will obviously bring about additional capital costs and I have no idea what this might add to project economics, but a simple calculation of 18m lb's resource @ spot prices of $30/lb equates to sales of roughly $540m (LOM). I suspect this would go a significant way towards offsetting the operating costs for production of the vanadium and uranium certainly seems like it is going to be a hot commodity that you want exposure to in the coming years.
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