Replying to @TigerthecatYeah it looked like Techint were...

Replying to @Tigerthecat

Yeah it looked like Techint were applying a fair bit of pressure to get the job done before the lithium price starts to move back up again. It was definitely perfect timing for them.

In terms of comparison, Alpha is on the chart I included in my post above at $62 EV per tonne of LCE compared to Galan at $28, implying that Galan would need to double from here to trade at the same Total Resource valuation, without taking into account the differences you mentioned regarding grade (218mg/L vs 860mg/L) which forces them down the DLE path, and stage they are at (PEA vs DFS/Construction for Galan). The 3rd item you mentioned, Measured vs Indicated is less important given that both will translate to a Reserve and I'm not sure it makes much of a difference to valuation whether you end up more or less Proven vs Probable resources within the Reserve. But you are right, it is another factor to take into consideration and indicative that Galan is much further along in its pathway to production.

When comparing the Measured & Indicated Resources (see chart below) we have $85 EV per tonne of LCE for the Alpha Lithium offer compared to Galan at $31, implying that a similar valuation for Galan would be 2.74 times higher than the current share price (a $1.78 valuation). I think you are right that this provides a rock bottom floor price when considering Alpha's inferior resource and in the context of the current lithium market (I think we are pretty close to the bottom - if we are not there already). In terms of the premium that we could expect to the Alpha Lithium offer, I'm really not sure other than to say that large (multi-decade), high grade, low impurity resources are like hen's teeth, so the premium should in theory be reasonably substantial. I think the Posco, Zijin and LPI transactions in the middle of the chart are more representative with respect to the style (evaporation ponds) and grade of the resource. The LPI transaction is particularly interesting given that it is similarly high grade (higher than Galan but with more impurities which increases capex - the Salt Removal Plant in the LPI DFS was double the cost of their Carbonate Plant), and the transaction was initiated only a few weeks ago (i.e. in the currently depressed market), but on the other had it was really a non-competitive situation. Other than the jurisdictional differences (which are significant and mean completely different things to different people), it's still probably the closest transaction for valuation purposes we have had recently. The Posco/Galaxy transaction is another great reference given that it is located on the same Salar but was quite some time ago now (November 2018).


Lastly, something I noticed the other day when looking at the satellite images. We seem to have well and truly started building the 2nd pond now:


ALL IMO DYOR