Delta Lithium General Discussion, page-221

Thanks for posting that @soarer ... always a little interesting to read what the "sell-side" analysts are saying.

So I find some of their "analysis" as "disconnected". For example

and yet there is little or no sales in that cash flow???

Also - kinda hard (for me anyway) to accept US$1,400/t as the long term nominal spodumene price from FY2025.

So here is a little bit of a different DCF analysis. Sure we don't have a PFS or DFS. But there is plenty of reference points to use. For example I'm using US$4,200/t (actually all analysis the analysis is in US$ and then converted to AUD at the end). I use Galan Lithium's US$688/t for Opex from scoping study (also US$300M as capex) and while annual production is anyones guess at this point its hard to believe it would less than 150Ktpa.

Now I'm really only valued DLI based on just Mt Ida without any gold or Yinnetharra included. It's also not "risked" per se. The model is "risked" in the sense that the discount rate is well above the "equity risk", but then again BP is suggesting that risking at 50% is used on Mt Ida even though they agree (and Dave Flanagan is risking his reputatio - and a lot of shares - on mining by Christmas). They risk Yinnetharra at 65% even though it is well off into the distance.

So here's my modelled view ... the present value of the cash generated yields a "fair value" of ~AUD$3.30 - so plenty of upside. You should also look at that price as NOT what it should trade at. After all who would pay the "fair value" (but risked) of something based on future expectations. A buyer would always pay less right (or try too ... cue ALB bid for LTR). I also used 524M for SOI as fully diluted (assuming options and performance rights in the money). Also I making a little assumption that Capex spend is actually covered by convenient prepays from DSO and OTA (otherwise DLI will need to do a small equity raise to cover it ... or get a small loan as OTA will be enough to service the loan).



DO NOT look at this a "upramping" ... look at it as theorectically indicator of value.