Been a while but kept meaning to come back to this.
If I look at the "high case" from the latest feasibility study (assume we're an investor certain on future lithium demand consistently outstripping supply) it gives an NAV of around $1.8B (10% discount rate which is industry standard). Let's also assume somehow everything works out perfectly and GXY manage to fully self fund - we'd be looking at a share price of around $4.40. Now I'd have to apply a discount rate of around 0.8 at least due to the inherent risks associated with operating in Argentina. So we're at $3.50. James Bay is a bit of an unknown at this stage so let's optimistically assign $2 per share (far too early and too little known to assign anything north of this). So we're at $5.50 on what I would consider all the stars aligning. I think it's also important to note that if GXY can't self fund then someone is going to want a healthy share of that $1.8B - maybe we'd end up $4?
Anyway, I'd be really interested to hear people's thoughts on whether you think I've missed anything obvious here, but I just can't work out logically how some people's $8-$10 future valuations come about?
GXY Price at posting:
$1.36 Sentiment: Hold Disclosure: Held
