Reviving and updating this thread that we use to have on the PM1 boards.
Few points to note:
1.T.E.P made a point that the short- term target for QPM should be $200m (20c) based on comparisons to others in the space on a EV/NPV. I have expanded the comparison in the previous thread to include a MC/NPV ratio. If we take the average MC/NPV ratio of 0.198 and assign that to QPM we get a MC of $198m. It should be noted that QPMs NPV number should increase significantly with the increased plant size. Which would provide some excellent upside above and beyond the targets being talked about.
2.Commodity Prices
QPMs (then PM1) latest PFS release was entitled ‘Updated PFS excellent through all price cycles’. Currently of the Nickel Sulphate and HPA plays listed QPM is the only one with revenue at spot prices above that of forecast revenue from the feasibility studies. (I used spot prices where available and $20 000 USD/t for the 4N HPA, note I also increased AUZs scandium price to match CLQs) What makes this even more impressive is the fact that QPMs pricing is particularly conservative compared to others. It does through a diversified mix of products. In particular its Iron revenue is independent of the battery thematic and a significant contributor, particularly at these price levels. I have included some revenue composition charts below.
3.Offtake partners
Have added offtake partners to the comparisons as an area of interest. Currently ATC has Mitsubishi as an offtake partner for its HPA which is quite a feather in its cap, A4N has an offtake agreement with Orica for its fertilizer by-products which comprise roughly 18% of total revenue. CLQ has a binding off-take agreement with Beijing Easpring for 20% of production with the option to increase 50% through project participation. LG Chem and Samsung, being 2 of the biggest players in the battery space make excellent Off-take partners. It has been publicly stated that these companies seek from QPM product in excess of production output in the PFS. The fact that they are both Korean, coupled with the joint development agreement with Korea Zinc over the Iron product could potentially lead to a contribution from the Korean Development Bank.
Revenue Composition Charts
QPM has long played catch-up with the others in the sector. It was the last out of the blocks and it was only vended into PM1 long after the battery market hype of 2017 and for that reason lay dormant for quite some time. Certainly some big players have taken notice in LG Chem and Samsung and it looks like finally it is started to get re-rated by the market accordingly. GLTAH
