January Tea Leaf Musings !, page-364

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7 Posts.

21/01/18

11:03

Post #: 30444754
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Originally posted by Pokerface ↑

At 5mtpa and at current concentrate prices, this business produces $800m US of revenue ($1bA), and $624mUS operating profit. This is based on concentrate prices of $1000US/t and costs after tantalum credits at $220US/t. These are not my numbers. These are company numbers per the Exploration Manager in recent presentations.

The 5mtpa operation is almost a given, if you have followed all the announcements.

PLS has been working on strategic arrangements with the likes of LG whereby they will potentially enjoy downstream profits. This will add a lot to profits; a lot!

There is a theory that Mt Fransisco may be a larger resource than Pilgangoora (which is huge, and much larger than the reported 156mt). There is a theory that Mt Fransisco will support a second 5mtpa operation.

The lithia at these operations are of the pure variety. This upgrades to battery and technical grade without the need for a further interediate expensive process, which the brine operators are lumbered with.

There are very strong indications that lithium prices are heading higher in the next few years. Yes there will be extra production coming on stream, but it is slow. The demand uptake looks exponential to me.

It is very much within the realms of reasonableness that PLS will have a profit model exhibiting > $1bA per annum net cashflow in the next few years, and there may well be strong indications they are sitting on a massive high grade resource. The uptake in the EV and battery revolution will probably coincide.

So, at that point, what is this enterprise worth? What did Greenbushes sell for way back when lithium was not even on the radar?

$7.50 would equate to around $13b market cap. (I actually think there is a strong theoretical case for a $20b market cap at a point in time in the future) That is by no means out of the question at that moment in time. Comparing PLS to some other resource company (like FMG) is not valid. Different mineral, different time, different quality of resource. Tesla has a market cap of $58bUS. Has never made a profit. Not saying that's logical, but it is real!

I am hanging on to as many as I possibly can, and have bought more in recent days. These sort of major industrial shifts do not happen often, and frankly, all my research says PLS is the place to be. None of the others hold any interest for me.

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Thanks for a very good understanding of PLS as I feel you are 100% spot on with your research into what Pilbara Minerals has under toe. Great result

PLS Price at posting: 99.0¢ Sentiment: Hold Disclosure: Held
6 Upvote

0 Great analysis

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January Tea Leaf Musings !, page-364

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January Tea Leaf Musings !, page-364

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