Hi @ResourceEagleGalan say they will be producing in CY25 so I...

Hi @ResourceEagle

Galan say they will be producing in CY25 so I think it's reasonably logical to attempt to determine a valuation based on future cashflows which are only a calendar year or so away. I definitely do not select IGO as a direct 'peer' but because as the lowest-cost hard rock producer in a genuine tier 1 jurisdiction, it's probably a useful comparison to see where a solid analyst like Hoff sees them trading on an EV/EBITDA basis over the coming periods - remembering that Greenbushes has its own growth strategy as well. To that end (having fixed my glaring spreadsheet ROE error) the EV/EBITDA multiples look much better here for Galan. Assuming that the finance closes at US$90M and the share price gets a bump - say at a bare minimum to the cap raise price of $0.46 - this is what the multiples would look like for the various bearish-to-bullish lithium px scenarios:

So if Galan were to command the same EV/EBITDA multiple that Hoff uses for IGO's Greenbushes, that would be a SP of around A$0.74. It represents great upside from current levels - around +92% - but then you have to start pulling apart the logic behind a given multiple - i.e. this is in Argentina, a larger but unfunded growth project (phase 2), the debt load relative to their earnings, a fairly unique product strategy, etc. All of this would feed into the EV/EBITDA multiple, which in my mind raises the question - does it deserve higher or lower than Greenbushes?

As a final note, I personally don't think Wildcat or Azure are good comparisons here: both are fairly recent discoveries. Wildcat is still drilling and haven't even started their studies yet - they are years away from cashflows so it's impossible to do this sort of analysis. Azure is still working on their Scoping Study (due end of 2024) and are also years away from production cashflows. The latter has been the subject of a crazy Gina takeover offer, which completely distorts the 'value'. I'm not at all across LPI. My question: how would you go about applying a valuation to Galan? Cheers