They may be low but I would rather be a little conservative at...

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Wurlitch

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29/06/23

19:11

Post #: 68540903
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Originally posted by calmbeforestorm: ↑

Your figures seem low. Let me explain.

We need to allow for development dilution assume that 50% will be funded by debt or funds from car makers etc allowing for a $1b development cost.

Let’s assume we are at the same stage of development as LTR with a resource the same as LTR ie 155mt. If they raise $500m equity for development plus another $100m for drilling out the resource at say $3 (I will explain below where this figure comes from below) the dilution ends up with AZS having about 600m SOI or for the 100% of the project about 1,000m SOI.

Using LTR valuation as a guide ie $6b we end up with a pre production valuation of $6 per share or a MC of $6b (I have assumed the equity raising for development is half the $6).

If the resource is 300mt then the SP is about $12 (or $12b MC) If the resource exceeds this then the valuation will be higher.

Both these share prices may increase on production but probably not significantly.

These are very rough ballpark based on LTR valuation.

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They may be low but I would rather be a little conservative at this stage.
An in-situ resource valuation higher than 2.5% ($100 per ton SC6) is probably likely should further drilling indicate a large resource and/or higher grades.
At this stage I think 2.5% is about right. Unless someone presents a TO offer, then 7.5% might be appropriate?

AZS Price at posting: $1.65 Sentiment: None Disclosure: Held
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0 Great analysis

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