Australia's largest stock trading and investment forum Australia's #1 stock forum

LLL

Click for more information

0.00%

50.5¢ leo lithium limited

yes totally agree. But unfortunately market sentiment also plays...

First 3 Last

Share
Profile

Follow
JungleJim1

384 Posts.

66

10/06/22

19:04

Post #: 61949271
Share

Originally posted by taylorstjames: ↑

Hey all! Thought I'd start a thread where we can direct people to start here as a primer on all things LLL.

As a starter -

Per @Ubique13 's here -> https://hotcopper.com.au/posts/61135540/single

LLL Value

Fundamental Analysis

I’ve posted extensively on how Goulamina is in the top 3 hard rock lithium assets globally and certainly #1 of the ASX listed projects, refer back to those or company presentations but to summarise:

- Large scale (>100Mt), yet has barely been explored with the deposit open in all directions = large production rate (>800ktpa), scope to increase to meet global demand
- High grade (>1.5%) = lower costs & increased production
- Excellent metallurgical and mineralogical characteristics = lower costs & superior product
- Lowest OPEX of ASX listed projects = increased profits & protection in a downturn
- Partnership with Ganfeng = funding & security of offtake
- Advanced, with constructionunderway and ordering of long lead time items commenced
- Low CAPEX & Capital Intensity – no longer worth worrying about as the project is fully funded, but worth mentioning in regard to further expansion

The DFS completed in 2020 demonstrated a post-tax NPV of $4.1B (45% attrib. to LLL).

Given that the project is much more advanced, fully funded, and SC6 prices are up to $6,000/t from the ~$1,000 used in the DFS, I think it’s safe to say that LLL isworth >$4B now.
Things to look forward to: Goulamina will ultimately end up a >8Mtpa mine. Vertical integration with the production of lithium hydroxide & sales directly into Europe must be next, followed by the development of other lithium projects in Mali & Ivory Coast.

Broker Valuations

Cannacord, J Capital (an interesting contender!) and Euroz have price targets on FFX of ~$1.90/share with a large weighting towards the value of Goulamina.

Cannacord's sensitivity analysis below gives an indication of the change in NPV based upon higher SC6 prices.

At $2,300/t SC6 pricing, the post-tax NPV of the project is >$11B(>$5B attributable to LLL).

With current SC6 pricing >$6,000/t, contract pricing of $2,300 is in the bag.

I would like to see Cannacord’s figures at $5,000/t contract pricing. I imagine that wouldimply a valuation of >$10B for LLL

Peer Comparisons

LLL’s peers are valued much higher in terms of sheer market capitalisation, let alone market cap/NPV.

Our closest peer, AVZ who are also developing a large-scale lithium mine in Africa are trading at >$3.5B.
Other peers are trading in the $2.5 - $3.5B range but more interestingly are trading well above their DFS NPV’s.

This should put an absolute floor price on LLL at ~$2B, but anequivalent value of >$3.5B.

As discussed above, LLL has several advantages to it’s peers i.e. OPEX, production volume, advanced stage, offtakes, permits, etc therefore FFX should trade at a premium to some of these peers.

Expand

yes totally agree. But unfortunately market sentiment also plays a role. It really depends on the short term traders and the majors at the end of the day. it will be an interesting few days when LEO lists. I'm sure i made the right decision to buy into LEO- longish term but am drained of funds to support the Finch and LEO

LLL Price at posting: 0.0¢ Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

Reply

First 3 Last

Add LLL (ASX) to my watchlist

SPONSORED BY