AGY

4.00%

12.0¢ argosy minerals limited

.....nice calcs.......yet you were buying in the 30c-40c ?? What...

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whitemetalman

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02/03/24

20:54

Post #: 72714412
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Originally posted by Rob826: ↑

I'm keen to hear how you arrived at $5 mate. That's at least a $7b market cap, if not more through further dilution. In three years time, AGY won't even have the 10 ktpa expansion up and running.

The current spot price is around USD$14.5k/t, but let's be generous and work off a long term average sales price of US$25k per tonne. But then we need to factor in a discount for a long-term offtake. Again let's be conservative and roll with a 10% discount. As we know, nothing is perfect, so let's assume production at 90% of nameplate and keep things simple by assuming everything is battery grade.

2 ktpa Operation
US$25k x 0.9 (long-term contract discount) = US$22.5 gross revenue per tonne
US$22.5 - US$6.5 (minimum OPEX per tonne) = US$16k per tonne after OPEX
US$16k per tonne x 0.6 (~40% for taxes and royalties) = US$9.6k net profit per tonne
2000 tpa x 0.9 (90% nameplate) = 1800 tpa gross production
1800 tpa x 0.775 (AGY JV share) = 1395 tpa AGY share of production
1395 tpa x US$9.6k = US$13.392m or A$20.519m annual profit.
A$20.519m annual profit - ~A$1.5m annual costs for AGY admin/salaries/Tonopah = ~A$19m net profit per year
A$19m x 12 (assumed P/E ratio based on comparable peers) = $228m MC
$228m (MC) / 1.4b (SOI) = 16.28 cents share price

12 ktpa Operation
US$25k x 0.9 (long-term contract discount) = US$22.5 gross revenue per tonne
US$22.5 - US$6.5 (minimum OPEX per tonne) = US$16k per tonne
US$16k per tonne x 0.6 (~40% for taxes and royalties) = US$9.6k net profit per tonne
12000 tpa x 0.9 (90% nameplate) = 10800 tpa gross production
10800 tpa x 0.9 (AGY JV share) = 9720 tpa AGY share of production
9720 tpa x US$9.6k = US$93.312m or A$142.977m annual profit.
A$142.977m annual profit - ~A$1.5m annual costs for AGY admin/salaries/Tonopah = ~A$141.5m net profit per year
A$141.5m x 12 (assumed P/E ratio based on comparable peers) = $1.698b MC
$1.698b / 1.4b (SOI) = $1.21 share price

These numbers are IMO only, but I think some of my estimates err on the optimistic side. I don't actually think AGY will consistently produce at 90% nameplate, nor do I think they will achieve 100% battery grade. I also don't think they'll remain at 1.4b SOI, as I think we'll be diluted along the way (either to fix the 2 ktpa plant or to form part of the funding for the 10 ktpa expansion). Additionally, we need to factor in the payback period, whether that is debt or pre-paid offtake which amounts to foregone revenue. Importantly, the 10 ktpa expansion won't even be built by early 2027, so I really struggle to see how anyone could arrive at such an optimistic share price of $5 in three years time.

I'm happy for my numbers to be picked apart as necessary, we're all here to learn (I hope).

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.....nice calcs.......yet you were buying in the 30c-40c ?? What am I missing here? I take it that you believed the extra 10k ton/annum was "imminent"? I think that time when the SP was heading north and only north was probably what created FOMO for lots of players.....

Last edited by whitemetalman: 02/03/24

AGY Price at posting: 16.0¢ Sentiment: Hold Disclosure: Held
4 Upvote

0 Great analysis

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(20min delay)
Last 12.0¢		Change -0.005(4.00%)		Mkt cap ! $168.5M

Open	High	Low	Value	Volume
12.5¢	13.0¢	12.0¢	$235.2K	1.876M

Buyers (Bids)

No.	Vol.	Price($)
29	956840	12.0¢

Sellers (Offers)

Price($)	Vol.	No.
12.5¢	19944	2

View Market Depth

No.	Vol.	Price($)
27	876840	0.120
12	539478	0.115
11	644049	0.110
9	1154619	0.105
19	1490206	0.100

Price($)	Vol.	No.
0.125	19944	2
0.130	502781	8
0.135	530128	14
0.140	807683	11
0.145	507650	9

Last trade - 16.10pm 03/05/2024 (20 minute delay)


Last 12.5¢		Change -0.005 ( 0.00 %)
Open	High	Low	Volume
12.8¢	12.8¢	12.3¢	1090017
Last updated 16.00pm 03/05/2024 ?

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.....nice calcs.......yet you were buying in the 30c-40c ?? What...

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