The sensitivity analysis in LKE’s ‘DFS’ (cough) shows everything wrong with it:
So a 15% difference to the assumed lithium price (i.e. US$28,100/t LCE, still way higher than spot and most LT estimates) drops the IRR from 20.9% down to 6.5%… you can almost get that in a bank account.
If they used a realistic price assumption, the IRR would be negative! No wonder they commissioned a “bespoke study” to come up with US$33,000/t… they basically chose a number that tipped them over a 20% IRR, which is still disappointing for a project risking so much capital in such a widespread commodity.
Whilst the price action on GLN has been disappointing, seeing stuff like this does make one appreciate how they’ve gone around their studies etc.
The sensitivity analysis in LKE’s ‘DFS’ (cough) shows everything...
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