What you've outlined is the perfect outcome for FFX...

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Ubique13

910 Posts.

3383

14/05/21

10:26

Post #: 53171726
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Originally posted by WoodySpoon ↑

Yes, that ought to be something like the deal. Which sounds reasonable and achievable. Putting the pre-development valuation of 100% at $700 million gives the new partner significant upside to make it worth their while. Profits would incredible with that set up - no further CR needed, even with us only having half the company. Can't expect partner to pay full price given the risk and work to be done unfortunately, but what the final price may be ... I just cannot tell.

My guestimations vary incredibly depending on the day and my mood. If you're thinking negatively then we get the paltry $100 mill for half - the board get their options as they pass the $200 mill MC "hurdle" for full company listing, and we move on to further CRs. If you're thinking optimistically we get a KDR style valuation and we move quickly to production with a fully funded 4 MTPA plant and accompanying secondary plant set up specifically to take our spod feed - money falls from the sky into our bank accounts for the next 25 years.
Maybe the truth will be somewhere in the middle.

Just how the deal is structured, who they are, and who has control of the new company will be interesting. No doubt FIRB will be watching. For that reason you'd love it to be MIN or BHP or similar....

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What you've outlined is the perfect outcome for FFX shareholders.

Even a fraction of that scenario would result in hundreds of millions of dollars of value unlocked for SH.

Some mental masturbation from me on the optimal scenario for FFX:

If ~$300M could be achieved, then the company would be fully funded = no financing risk, no dilution and a huge boost to economics = value unlock.

Partner to market the products as per SQM & KDR's arrangement = no offtake risk, likely a better outcome & IRR = more value.

Partner to receive EPC contract = reduced construction risk = more value.

Partner to be an existing lithium producer therefore has the IP and capability to employ a downstream strategy. Could not even go down the downstream path without such a partner = significantly more value

FFX to provide mining services to Goulamina similar to MIN's broad strategy = more value

>4Mtpa plant
>40 years mine life (once the obvious exploration upside highlighted by Karl is proven)
Lowest cost quartile spodumene producer at $281/t (DFS)
>50ktpa lithium hydroxide plant
Low cost operating environment + low spodumene cost + proximity to EU = lowest cost quartile lithium hydroxide producer

Run the numbers on the scenario above and you'll lose your mind.

Last edited by Ubique13: 14/05/21

FFX Price at posting: 38.0¢ Sentiment: Buy Disclosure: Held
71 Upvote

21 Great analysis

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