ASX Today, page-34864

@anatol, (can't reply to your post hence linking)

Thanks for this. I decided to do some quick calcs as well.
Red font = input cells
Black font = equations
Blue = outlining formula


See below:


A couple of points:
1. Agree current valuation is based on value of resource (excluding costs of production) + capex costs.

2. Value of the resource is dependent on the spodumene price used, and converting it to years depends on mine life.

3. Resource can increase through further exploration, so analysis is static in time.

4. Valuations like this are probably not worthwhile for companies about to go into production - they should now work/transition to on profit outcomes and share price drivers driven by Earnings Per Share, Dividend Yields and Price to Earnings Ratio. To illustrate in production if your profit is say $500 million per year and a P/E ratio of 10 applies then your Market Cap becomes $5 billion (assuming the market is pricing that entity on a go forward basis as profit will remain there). Just have to look at PLS for that - when PLS was been valued at $15 billion it was based on profit on a P/E basis IMO, and obviously as spodumene prices have fallen so too has its market cap (and how it translated to SP).

Ultimately, and the irony is here, markets have crapped themselves on lithium because prices are falling from their peaks, but the irony is the current price is still way higher than what most lithium companies with past DFS's have used in feasibility studies. For LTR it is all about ensuring in production that it meets the forecast opex costs, and that it does achieve its recovery rates in WOF. Everything else will look after itself, assuming spodumene prices remain above say US$1000 per tonne (which they will IMO for a while to come).

Now this is a long term play. Too many on here spend way too much time looking at day to day price movements. Gina didn't come here for daily price movements - it is a long term play for her, or one where she will in time IMO lob a bid (probably around production time but that is a guess). For anyone who recalls Atlas Iron, daily retail holders felt it was a basket case, Gina scooped in as she has a long term view, and maybe check out what the previous AGO has now contributed to profits (hint way way way more than what she ultimately got it for in the takeover). A history lesson for other below:

Gina Rinehart’s Atlas Iron posts near $1bn profit in big year for the billionaire’s iron ore assets - Atlas Iron

Gina Rinehart eyes magnetite opportunity for Atlas Iron - Atlas Iron

From one of the articles is this quote:

Atlas Iron has delivered billionaire Gina Rinehart almost $1.5bn in profits in only three years, since she beat fellow mining magnates Andrew Forrest and Chris Ellison to acquire the junior miner for $427m.

Unless one sees the bottom falling out of lithium markets, which is not my view, then I expect there will be mergers and acquisitions in lithium markets. Gina is here for the long term, as are others.

All IMO IMO IMO