Future Share Price

Hi POSters

What is the Future Price of POS?

By the way, I hope the nickel price doesn’t go completely ballistic. I would rather it stayed in what I would call a “goldilocks” range of say $9 to $13 USD. If it gets too high then we could see battery chemistry changed and/or too many other potential players getting on board, leading to a market glut.

I have played around with a spreadsheet to develop a notional share price value, based on being in production for at least 2 quarters. My main assumptions are -: annual production of 935,000 T, head grade of 2.5%, recovery rate of 80%, annual nickel concentrate production of 14,960 T, AISC of $5USD, Exchange Rate of 0.75 and a Nickel Price of $11.50 USD. I have excluded the gold tailings and have not made provision for any cobalt or copper credits.

I have also done a ‘back of the envelope’ valuation version based around our current nickel in ground resources of 395,000 T. Excluding the cost of refurbishment capital, if we were producing now, I would estimate a profit margin of circa 175%, which is not a shabby business model! Anyway, after running the numbers through my magical black box spreadsheet, I calculated a notional share price value of $1.39. Yes folks, a price above the Great Man’s (TB or not TB) semi-mythical $1 forecast.

I ran a few other scenarios and brought in the resource valuation numbers as well and that generated a broad range of share price numbers, basically achieving 10-20 bagger results.

Seriously, we can take confidence in where we are headed and settle in for the ride. All the ducks are being lined up with the FID/BFS coming up, a full refurbishment program being put in place, additional drilling undertaken, increasing our resources and then we will be swinging into production. By then Mr Market will have woken up and our currently underappreciated share price will have been left way behind in the rear vision mirror.

As ever DYOR as I have only recently left the asylum (but I am taking my meds).

Cheers U