GXY vs PLS, page-10

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blastfurnace

1,858 Posts.

373

09/06/16

22:21

Post #: 18000979
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Originally posted by Thesi ↑

Here is a response to @ozblue I placed in the Pilbara thread and thought I would share it here for those that are interested on my comparison.

"Have been asked for an analysis by moderators to answer your question so here it is.

When Pilbara goes towards construction, based on what I have seen mentioned by John Holmes of the companies management they are examining production rate of 300,000tpa of spodumene.

At current price of $600 USD per tonne that would equate to $242 million per annum and at a 10% value on income to market cap would place Pilbara at a market cap of $2.4 billion.

Michael Fotios in a recent interview has indicated that Mt Cattlin is being considered to upgrade to 250,000tpa and James Bay has been considered to be a replication of Mt Cattlin.

The construction of James Bay as a replication would be completed by the time Pilbara have their own plant constructed. Forgetting ramp up cycle to maintain an apples for apples comparison the rock projects alone for Galaxy Resources would be 500,000tpa of spodumene at that same $600pt again using apples for apples.

Mt Cattlin and James Bay alone using the same equation I used for Pilbara would provide an annual revenue stream of $403 million and at a 10% value on income to market cap would place Galaxy Resources at a market cap of $4 billion.

Sal De Vida at full production will produce 25,000 tonnes of final grade lithium. Similar to that of Orocobre. Right now Orocobre are receiving $10,000 USD per tonne of their final product.

As an apples for apples comparison with Orocobre Sal De Vida will add a further $3.4 billion to that market cap bringing the grand total to $7.4 billion.

To be able to achieve that same level of market cap Pilbara would need to produce 916,000 tonnes per annum of spodumene.

I never look at the through put I always look at the final product. Be it spodumene or the LCE.

Good luck!"

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Valuing a resource on revenue is illogical. Heard of the term OPEX? So is assuming revenues will be equal for that matter.
Note my sentiment on GXY is buy.

GXY Price at posting: 54.5¢ Sentiment: Buy Disclosure: Not Held
5 Upvote

0 Great analysis

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