A lot of out-there valuations on this thread as it then moves back to SP. So I thought best place to start is back at the DFS for Authier - with this statement in it -
2. It is pretty obvious if you go back to the DFS of 2019, that current SP has overshot NPV value and is starting to accord with an assumption the market expects Authier to be in production using P/E10. See below:
A good way to explain the comment above is if a TO was lodged on the NPV valuation of Authier alone, SP has overshot, so the market is clearly looking at expansion scenarios here and is also pricing in a significant benefit around its play into the NAL acquisition and how that leads to a 'Hub' concept which SYA further leverages growth from (however defined). In other words the market is currently speculating on what that expansion scenario is, and it will be interesting what SYA has been saying publicly around the expansion scenarios and how it may revisit the November 2019 DFS. To be frank the spodumene price remains reasonable in the DFS above as a long term price, because spodumene prices will not average US$1000 (as some in other threads might allude to) and above long term as new supply comes onstream. When prices get too high new supply comes onstream is the point - the current high prices benefit brownfields projects. The other likely speculation is SYA's move into further processing of its own resources into hydroxide so as to maximise the benefits available from its lithium resources - this is a key benefit.
In addition, I suspect the market is looking at its other expansion strategies since that DFS - outside the NAL acquisition - especially the agreement with AJM (and its possible diversification scenario into say gold exploration with its comments around its moves in the Pilbara been about not just finding lithium but also seeking a "Hemi' opportunity. Obviously as an explorer in those parts, there will be risks associated with exploration itself as we all know, so this part of any evaluation is speculation only as need to first find something to ensure a valuation for it is locked in long term.
Obviously SYA remains a spec play, but over the last two years has moved in a way that the market is taking notice, and clearlu Authier and the Hub concept is a good strategy IMO. Obviously the market IMO is looking at expansion scenarios in SYA plans is my point, because pricing SYA on its 2019 DFS alone is not what is driving the SP as the above seeks to show etc etc. So over to others - what do you see as the likely new revised production profile for the project, and for one I assume looking at higher production levels and longer mine life to that 2019 DFS is my point, which means part of the current SP growth is around speculation of what that may be.
Value to SP does not have to be a function of resource size is also a key point, as PLL and CXO clearly shows when compared to companies with much larger resources. Ultimately a small resource with a possibility of entering market in say two years time IMO will always IMO be worth more than say a very very large resource that the market thinks will not enter market for say 10 years. In comparing resources a key is always market entry points too me, so the question for SYA becomes when do you think it can enter market and at what configuration.
Final thought:I will copy this post into a peer comparison thread in due course but for those interested in research here are some posts around lithium demand in that peer comparison thread, as well as comments on battery specifications, role of brines and hardrock in meeting EV growth challenges and some peer comparisons to other stocks (for those who like to research etc).
1 Understanding brines, spodumene, other depsoit types, demand forecasts etc -
Post #: 525084252. Process flowsheets and comparisons to some deposits -
Post #: 542837273. The thread in which those posts come from has other data.
Anyway, I am sure some will disagree with the above, but I thought some FA perspective might help here as well, or at least something for yourselves to debate and blast me on. My interest here is I am keeping an eye on this one now as appears an interesting prospect, one I hadn't looked at before and one now interested in following. To those who invested last year all I will say is well well well done to yourselves.
All IMO
(20min delay)