Yesterday’s announcement has started the countdown.
Leo is going to be one of the World’s largest hard rock lithium producers, a low cost project in a country with a long uninterrupted mining history. Our NPV is $4.1b based on Li prices a quarter of the current spot prices. The outlook for Lithium gets better by the day, every day you read about a new car manufacturer going electric, internal combustion engines will soon be a thing of the past.
We have 100% offtake and the World’s biggest lithium converter as a partner, yet we are running the project. When the capex increased in the updated DFS, they said, no problems, we’ll provide debt up to US$120m (previosly agreed at $64m). Our resource is open, we’re fully financed, fully licensed, have a cheap work force etc etc
The project is underway, in less than 2 years we’ll have our first shipment of SP6.
We have an experienced management team, who have team members from Green Bushes, Pilbara and Altura with prior Li commissioning experience.
There is no doubt about it - this project is happening.
The nature of the LLL share allocation means there won’t be the usual broker - get rich quick, giveaways. Anyone that ends up with a LLL share has been fairly dedicated to hang in thru the demerger process. The bulk of the issued shares will be thru the in-specie allocation. These allocated LLL shares will be in limbo (untradeable) for the 3-4 weeks of the Entitlement offer, and probably a few weeks after that till Listing. Traders will not allow their funds to be tied up for that long - so that counts them out.
Yet combined with the gold business we trade at a fraction of the price of our peers.
Our production will be up there with PLS who have a market cap of $9.5 billion dollars. In fact our product is superior, with low grades they usually just get to SP5.8 - same as CXO.
IMO if institutions wanted to get a decent parcel of LLL after listing, the ownership base I mentioned above would mean they’d push the SP up considerably to get their fill. The only alternative is to buy FFX in the next 6 weeks.
As I said, the countdown has started.
