Yeah, it's an interesting journey.AVZ has gone from about 15c to...

Yeah, it's an interesting journey.

AVZ has gone from about 15c to 75c in 6 months.
...from a market cap of about $500M to about $2.5B.
Let that sink in. They have potential, sure. (I'm not invested there btw, but GL to them).

So, let's look at AGY....
Here's some rough round numbers for a quick refresher...

SP: 27c
MC: $330M
SOI: 1.3B

Scenario 1:
The funding deal involves some mix of equity, debt and prepayment.
The equity pushes SOI to 1.6B shares.
12ktpa production rate in 2024.
Margin circa USD$15k/t

This roughly equates to:
Earnings = USD$180M pa
= AUD$250M pa
@ 90% AGY, = AUD$225M pa
P/E of 15: MC = circa AUD$3.4B = SP $2.10
P/E 20: MC = circa AUD$4.5B = SP $2.80

This is just Rincon and whatever that may grow into....

Some people might say that the current resource doesn't justify that.... well, imo they forget that we are on the edge of a massive salar, and when you are making hundreds of millions per year, it is not that difficult to purchase adjoining/nearby tenements. $$ talks.
We know the Li is there. We know $$ buys tenements. Simple.

Some people might say yeah well those are rough estimates and who knows if we can get to 12ktpa.... well, I reckon there is a damn good chance considering our progress to date, continual de-risking and delivery of proven BG product. Many tonnes of it btw. If it was a sure thing, we'd be +$1 already imo. A naive market provides opportunity imo.

Some might say yeah well that could be years away. Sure, it will be. But the market is forward looking, and my guess is that the market will start to assign value towards this outcome, as we progress towards it, in line with progress and de-risking. The usual story. ...and so what if it takes a few years...? Look at the potential upside from the current SP. If it pans out, what is the CAGR of an investment here? WOW. Apply a risk weighting and it is still amazing imo. Also, consider that there is a very real prospect, imo, of our 12ktpa operation going live in 2024. Even if we assume a 2-year build out from mid 2022. Very reasonable imo.

With the market tightening and the forecasts pointing to increased supply deficits over the coming years, this all looks to be heading in one direction - scramble for supply and high prices persisting. For years. Sounds good to me.

I am excited about what is to unfold over the coming 6-9 months.
Imo it looks like we will:
1/ get our 2ktpa plant finished, commissioned and into production (huge!)
2/ get our approvals for the 10ktpa expansion (critical but just a matter of time imo!)
3/ finalise a funding solution for the 10ktpa expansion (huge!)
4/ lock in off-take for first few years (not as huge/critical but still great, and likely linked to the funding solution imo)
5/ commence/progress planning and design for the 10ktpa expansion, with a plan to start construction in H2 2022? (huge!)

This will put us firmly on the map as a serious producer. Imo it has the potential to re-rate us significantly, as the naysayers will be running out of uncertainty to point to. It moves us from "potential" to "actual", albeit at a smallish scale to begin with.
The above rough numbers suggest that a +$2 SP is possible, imo. Perhaps when the 12ktpa plant is running. 2024?
Imo we could easily hit half this SP as we move towards that goal. Maybe late next year? Why not? Just look at the "value" ascribed to various other "juniors" who are yet to even prove a successful scalable processing solution. Consider the resource comments made above. Why not, especially with the above 5 items ticked off and locked in.
This ignores any progress in Nevada btw. Let's consider that as a "bonus" or "buffer" for now, perhaps.



Not advice, just some perspective IMO on where we may be headed and when.
DYOR and do your own scenarios and sensitivity analyses!
I'll post some other scenarios later perhaps...

BIG year ahead, especially for those who have been here for years already!! Our time is coming!!

Cheers and GLTA