Banter and general comments, page-148

Bluegoose, thanks for sharing your calcs. A few points for discussion:

Downside Risks:

1. It seems you have not allowed for tax. The margin you mention might be EBITDA (bla bla Before bla bla Taxes bla bla). PE ratio is calculated using NPAT (bla bla After Taxes). That's a 30% hit once the profits are rolling in and credits/losses are used up.
2. If the mine life is short (7-10 years), a PE of 20 is unrealistic. Between the payback period and the sunset period, there won't be many years of strong profits plus strong outlook. BHP and RIO have PE ratios of 18-20, but they are solid as rocks and pay steady dividends for decades.

So personally, I can't see the current Finniss Lithium project justifying a share price above 30-40c.

But then some upside risks:

1. Expansion of capacity and mine life
2. Lithium fines
3. Higher than expected spod price
4. And of course gold and silver - although if these become asset sales, we may just get a one-off share swap or special dividend

Overall I've reached the same decision as you - DON'T SELL!

Figaro