ASX Today, page-2355

I guess valuations are based on what you assume is the development scenario.

1. In production share price is a function of nominal values relating to EPS, nominal profit and P/E ratios. LTR is not in production so valuations are not based on this currently IMO, so valuations are based on NPV values currently.

2. Before production, and here we are talking before DFS/finance/FID, share price is a function of NPV as you look at risks and the opportunity cost of capital from a valuation perspective. In production you go back to 1 above so the downsttream processing options will have higher nominal EPS numbers btw and therefore higher SP on the assumption DFS outcomes are met.

3. The time value of money a key, and that is the point. So many here look at LTR as if they are in production and the capex has been installed . Important for TO talk, because anyone taking over LTR will have a TO price discounted for the NPV value of capex and based on a discounted cash flow. I posted about this a while ago and the theory of valuation and TO is here - Post #:44658142 - and obviously is an old post.

4. NPV/Profit below comes from - 1st two columns Ann 9/10/2020 - last 2 columns 22/10/2020. In terms of 1st two columns assuming start up as spodumene operation as per that Ann to achieve the anticipated production start date. Given hydroxide/sulphate still at scoping study this is what is added on later - if this is the configuration one starts with then valuations adjust upwards in production.

So what is a fair value as of today - answer really depends on what the market is looking at.



Personally I suspect the market is assuming an upgraded NPV based on a spodumene operation with possibly the added hydroxide/sulphate plant. If it is only looking at the Ann without a hydroxide/sulphate plant then current SP is been influenced a lot more by Moora than some think here, in my opinion. If it is incorporating a hydroxide/sulphate proposal current SP less so influenced by Moora. The next major leg up here on the lithium project is the DFS, followed by offtakes and funding (assuming as TG says he is taking this to mining). Obviously Moora is the current SP trigger IMO given the table above.

Do your own scenarios - that is how the valuation would have been done. As I said too many here are doing valuations as if LTR is in production, given where it is currently at. Meaning, current valuations is currently based on SP been a function of NPV. This was a quick guide - enter your own numbers of anticipated shares on issue etc.

In terms of the Moora Ann, it will be interesting given that Ann did not have a number of 'signatures' associated with PGEs, albeit it is likely that if they exist - the mafics/ultramafics, they will be deeper given the drilling wasn't deep in that initial drilling program anyway. So agree with many here the two deeper RC holes are going to be the key to understanding the geology in that 'drilled area'. Posted this in OAR around signatures - Bottom half - Post #:47672363 and then Post #:46741749

Treat this post as you will - posted for interest sake as I like valuations. Correct anything you disagree with.

All IMO