I thought I might post some "back of the envelope figures", which are startling. I start from the assumption that management should be able to finance further development from off-take partners. Others may disagree but, from announcements, this is clearly the strategy now being pursued, and I believe will be successful. After conversion of options, they should have in excess of $10m in the kitty which should finance activities well past the end of the financial year. We already have reference to an operation mining 1.6m tons of 1.2% spodumene per year. So, I have adopted this.
1-6m tons ore gives 320,000 tons contained 6% spodumene concentrate. 75% recovery gives 240,000 tons saleable 6%spodumene concentrate. Current price is $12,000 a ton - gives income of $2,880,000,000 Processing should be well less than $100 a ton - gives cost of $160m which is just a rounding error. Then we have royalties and tax which should be less than 40% which leaves $1,730,000,000 for shareholders. I know that prices can go down and there is always some risk but apply whatever factors you want to, it is still a bonanza.
Can someone tell me where I am wrong.
ESS Price at posting:
42.0¢ Sentiment: Buy Disclosure: Held