It's hard to know exactly what the FCF amount will be as it's...

It's hard to know exactly what the FCF amount will be as it's hard to know what PLS consider the "sustaining" capital and working capital etc.

But here are my numbers with a few assumptions. My calculations may be floored but here they are;

1H - $2.23B total cash and $1.1B stated FCF and by deduction $1.13B in sustaining capital and working capital

Dividend at 30% of $1.1B = $330M or 11 cents per share for first half

2H - $3.3B total cash balance.

Assuming the $1.13B in sustaining capital from first half, I looked at things that may or may not have been accounted for in the 1H sustaining capital and came up with the following for 2H

- $67M Calix demo plant
- $560M P1000 FID and commitment
- $150M or so to go from 18% to 30% POSCO Hydroxide JV (I have assumed this is a goer and they will keep funds aside for it)

Let's call it an even $800M in commitments in 2H over and above the 1H which may or may not be right?.

$3.3B minus $1.13B minus $800M = $1.4B FCF as at end June 2023

At 30% dividend rate, about $420M or 14 cents per share.

I suspect my numbers are a little out and maybe conservative so I'm calling a 15 cents per share 2H dividend and believe my numbers would somewhat justify this amount.

I'm not worried about tax etc as they seem to be paying tax along the way regularly so I believe this has been taken into account.

Once they pay say a 15 cent dividend or $450M, the cash balance goes back to circa $2.85B on a 30June basis.

Then we do this all over again in 6 months time!!

Unless spod pricing drops or volumes drop, I don't see how the dividend can be less than 10-15 cents per half going forward based on a 30% payout ratio as I have allowed for a pretty massive almost $2 Billion in sustaining capital which will keep them busy for 2 years. Maybe a large acquisition is the only thing that could add to that sustaining capital requirement but I'll leave that to the experts.