Yes, thanks for the pickup @merwej - corrected below.This...

Yes, thanks for the pickup @merwej - corrected below.

This obviously doesn't change the EV/EBITDA multiple, but it does improve the payback periods on the debt.


As for the other points, each investor can choose their preferred method. In mining I tend to prefer EV/EBITDA rather than P/E, the latter which I find very subjective (bearing in mind when lithium was hot people were using P/E's of 15-20x when placing speculative valuations on things). Mining is so cyclical it just doesn't deserve such high P/E's, in my own opinion. Most of these lithium companies are not diversified either, they're usually single-asset operations/developers, which further should suppress the multiple chosen.

Technically speaking one should be more forward looking and include an element of phase 2 in the mix if doing a proper valuation. That's not what this is - it's just looking at phase 1 in isolation. That's because the company needs to clear the first US$90M debt hurdle, before they even think about financing phase 2 at US$311M incremental capital. Additionally, in my view Greenbushes is worth very little, and Candelas is time/capex risk-rated right down as well. Just my take, I obviously have tended on the conservative side with this one (and for IGO, the other name I've done this sort of work on) so I appreciate many here will want to take a more bullish view. I think the box on the right affords that - if LCE does get back to the US$20K mark longer term then there's definitely upside for GLN at current pricing.