Based on the graph above (from UBS, but incorporating all estimates in the consensus), I don't think you can use US$4000 in an NPV calc for ESS.
Considering we would be lucky to be in production by 2026, to use anything above US$2000 for the life of the project is hopeful. I personally would use US$1800 to be safe and to include that we expect 5.7% spud, not 6%.
It is ridiculous that they used $US1000 in the scoping study though, it'll never be that low.
Secondly your NPV calc doesn't account for any capex or debt repayments.
Using the sensitivity analysis from the scoping study (above), you can see that even a rise to A$1725 lifts the NPV to $528m, so you can assume that US$1800 (~A$2600) might have the NPV somewhere near $1bn.
For clarity I 100% agree with your sentiment, I do think ESS is undervalued by the market, by TLEA's offer and by the scoping study.
But it'll never make $1.1bn a year (on its own), nor does it have an NPV anywhere near 8x $370m as you suggest.
However, as I've said before my opinion is that the true value of Pioneer Dome is in direct shipping to Mt Marion.
If all of the above is what it's worth alone imagine what it's worth to MinRes, without the need for any of that capex and with the added profit from lifting the overall grade of spud being processed through the Mt Marion plant.
This is why I'm happy to be patient and wait for whatever it is that is stopping Min Res from making an offer.
Because in my opinion they certainly aren't playing games to try get the price down from the 60c per share (~$160m) they might have to pay now to 50c per share (~$134m) to save themselves $25m.
They're way too smart to risk losing what could be nearly $1bn of value to save $25m.
ESS Price at posting:
45.5¢ Sentiment: Buy Disclosure: Held
