So to does China. It relies on the rest of the world for the mining and extraction end of their processing. And this is one of the reasons we are seeing this ' Shift ' in the Top 50.
So as you can see by the illustrations courtesy of Mining dot com , it can easily be seen that in the nearer term , that Lithium extraction could in fact double to that of the precious metals categories . And in doing so , we would have to see a potential ' redistribution ' via some level of additions and deletions of the current Top 50
Keep in mind that the gap or difference in the Market Caps of the Top 10 verses the bottom 10 in the Top 50 are almost the 4 or 5 times the difference of everything ' in between ' , and that anything under $8 billion US didn't even see you secure the 50th position. Hence the reasons we don't yet see Pilbara did not make it nor did Allkem get even close.
So the question then becomes how quick might we see another 5 to 7 Top lithium companies with market caps larger than say their peer sized companies in the base metals and / or precious metals categories over this time period as the RESOURCE sizes in this category of Lithium grow almost exponentially in the hands of a select few operators.
What I also like about these pie chart illustrations is the fact that when you ' Combine ' the US and Canada together with the 26.4% for Australia , you already have greater than 50% now held by these 3 allied countries with over 53% to that
of China's 13.3% and where we can see that China was being squeezed in the 2022 figures as shown in the below accompanying narrative.
Now granted it has taken some of these Top 50 companies literally years to get to the valuations they currently are , whether it will even matter for someone like Sayona is a separate question because as the ' cycle ' for overall demand for minerals increases for these existing Top 50 , so too does the overall pie and the 8 or 9 billion which used to get you into it will no doubt be sitting in a cluster just outside when the new entry level is 10 or 12 billion US dollar market caps.
What I also like though with respects to the relationship of what Sayona's near term MRE to its present valuation to that of how the Lithium commodity mined can double from its 7% to potentially 14% like that of the precious metals category is the notion that if Sayona is more ' near term ' than others , and has the potential to mine 2 -4% of the world demand , it therefore in order to impact this move with the lithium commodity , it must also therefore impact significantly on its Market Valuation. And because that is what the current figures are telling us with the current 7% being representing by a combined US$105.2 billion across the 5 Companies in the Top 50.
So based on 2022 data , to move from 7% distribution of Lithium to 14% it would take in theory another US$105 billion of combined Company Market Caps , and to move the dial 1% , it would take US$10.5 billion in additional market cap .
So even if you argue that a lot of this potential 7% may never be reflected in the Top 50 ( which is NOT likely ) , and that it will sit outside the Top 50 , that would still mean that that US$105 billion in additional market cap would have to be distributed to how many Companies who would actually currently be in the ' near term ' potential to add to the Lithium share of the global commodities pie ?
One of the realities might actually be that in order for Lithium to grow by say double from 7% representation to 14%, that obviously something else in another category as well as those companies representing it will have to reduce while at the same time this overall pie is growing.
So what we're saying here in regards to Sayona is that it will be O.K to be one of those representing Lithium just outside the Top 50 - But who will be those potential other 7 companies who will represent Lithium potentially inside the Top 50 if the base metals and precious metals operators were to give up these positions.
And one of the only other additional ways I can really see how this practically unfolds is that those SUPER BIG ' Diversified ' players like the RIO's et al - that they decided to ' absorb ' more lithium into their diversified portfolio mix. So an overall decrease in diversified , and an increase in lithium. If your're measuring i in that way.
And that will mean an increase in consolidation via more Joint Ventures or straight up takeovers.
But what I don't subscribe to is these ridiculous valuations put forward for Sayona's ' Other projects ' like Mallina and Kimberley Graphite. If anything remotely like this when ZERO drilling and resource definition were possible , then we'ed have an across the board valuations being applied to the likes of QXR , EFE , KAI , or anyone else who has a vast interest or a bit of project ' nearology ' in some of these under explored areas. So you just don't value tenement holdings in this manner and its more about the metres drilled as represented by the quotient of resource defined ....and to a degree the overall cost per metre of drilling and identifying potential increased resources. If the cost of ' other ' drilling seem more economic governed in part by the market opportunities and price , then you focus more of this in areas where the financial outcomes and or increase in resource is more likely. If the geology for example proves more problematic , then you may park that particular endeavor and focus your efforts , capital , and abilities to raise more capital elsewhere.
So this notion of Kimberley Graphite having a value of $1.8 odd billion is simply ridiculous and something the Market would agree with me on in that it is not likely it would be ascribed now or in the immediate future - else we'd be seeing it already in other exploration hopefuls and we're not.
I do agree with the approximate valuation put on Moblan though - Because I've already spoken about a $1.5 billion market value on this component of Sayona's project values.
And I think its worth mentioning again where I believe ' more ' additional valuation is likely to come from with respects to Sayona's Northern as well as its Southern potential THIRD HUB. And that is by doing more in the area of putting your foot on potentially MORE logical and close in proximity highly prospective lithium pegmatite ground. And for that , you don't have to look much further that that of Victore Cantore's posturing Vision Lithium ,and for the reasons I have given in my previous posts on this.
And to back up this line of thinking more , you might only have to bck up to the Cindy comments post PDAC conference where she mentioned they had made certain connections and would be making more of these relationships going forwards.
Now I had gone through every single represented booth at the PDAC conference and could only find a Couple of worthy candidates that you could have even mounted a ' synergistic ' argument for . And that was RIO and Vision Lithium....... possibly Durango as well. But that's about it. Durango with its pending LCT drill holes , and Vision recently launching its small but highly prospective PEA based on its ONE single pegmatite #5 lithium dyke in the not too far away Frotet Evans Sirmac property.
So Vision is the BIG one for me , because if you were to add Visions' potential Tenements area onto that of Sayona's present area , you would almost end up ' Doubling ' it again to nearly HALF of whats currently on the radar for Lithium in the entire province of Quebec.
On a final comment. There has been much talk and comparisons made to PLS share price performance , market cap etc on this forum over the journey including by myself. fact that however one thing I feel is important and needs to be refreshed on this debate is that Pilbara's share price increases which followed on from their straight up resource increases including the obvious one from their acquisition of Altura .
So then in June 2021 around 6 months following this acquisition , they announced ' Further ' exceptional drilling results which basically saw their SP increase from around $1.40 to $2.33 or 66% less than 6 weeks later and virtually in a straight up line. From there and apart from the MIN divestiture of its stake drooping the SP slightly in September 2021 , there wan't much of any substance of announcements until 6th October when it announced a ' Material Increase ' in its ore reserves which saw its SP start its climb of approximately 89% to its $3.72 price on 14th January 2022.
So they PLS had the official start up of the Ngungaju plant one day after the ore reserves upgrade followed by the ' Ramp up ' and ' official ' FIRST concentrate
announcements a week later on the 13th October , follwed by its 6MW solar farm commitment a week after that . By this time , its SP was up around 11.7% since the ore reserve increase , and then really seem to fire up when it reported its finalised agreement with POSCO on the same day as it BMX auction one week later followed almost a month later on 23rd Nov when it advised it had increased its finance facility by $20 million US and its undrawn working capital facility by another $10 million to US $25 million.
So from what I can see , this resource upgrade following by a succession of ' Key ' announcement clustered around either side of the AGM presentation and Chairman's address were what really triggered the launch of Pilbara's SP into the rare air territory where we find it trading at today's prices. So to think that their SP is basically back to these year ago levels.
Important to remember as well that these 2021 announcements included the increased funding and finalised POSCO term sheet which included a revised 20 year supply of 315 ktpa concentrate ' AT MARKET PRICES ' to their proposed primary LHM chemical processing facility with POSCO , its increase to 30% interest in this facility by way of its 18 month call option , and its US$25 million off take ' prepayment ' facility to fund working capital and future expansions at its Pilgangoora plant. On that sme day of 26th October 2021 , they also announced their BMX auction where they accepted the HIGHEST offer of US$2,350 per dmt for its 10 million SC5.5 FOB Port Hedland which they also stated was equivalent to a SC6.0 ' CIF ' China price of US$2,629 .....so a difference of ONLY US$279 NET OF freight costs......
So comparing ALL this and comparing to the different times we are in at the present moment including prices and demand for Lithium ( which are still much higher than that BMX ) , and you can see that as I have stated in previous posts that Sayona is perhaps ONLY 6 months behind in realizing similar appreciations in its own share price subject to what type of announcements they can string together in similar succession to that of PLS back in 2021.
So effectively , we were at least 2 years behind in hindsight , but are now perhaps only 6 months until our SP starts to replicate these moves. So around 2.5 years in total with the amount of time we have already effectively ' served ' in waiting.
So markets prevailing and allowing us to realizes these milestones , that's the way I see it with respects to Sayona's valuation comparisons with others being free to have their own expectations.
(20min delay)