On closing prices today the market has:
- LRS trading at 14.22% of it's PEA NPV (
$3.6bn).
- GL1 trading at 11.21% of it's PEA NPV (
$2.8bn) however they used a $2,600/T spod price which makes their numbers totally useless.
- LTH.v (Lithium Ionic) at 9.46% of it's PEA NPV (
$2.44bn) LTH.v used a spod price of $1,859/T which is more reasonable than GL1, but still $160/T higher than LRS.
I'd like to do this calc for DLI and WR1 however DLI only has a JORC (and nothing recorded for Yinnethara yet) and WR1 is ..... well WR1 is WR1.
I'm going to pick on GL1 (as you can tell I think GL1's Manna deposit is less than impressive.
GL1 Manna PEA- PEA Spod price $2,600/T (Current spot pricing today shows $1,885/T)
- Capex of $430m (150% of their current market cap, making it difficult for them to equity raise the capital)
- AISC of ~$1,300/T (one of the highest I've seen and it's possible these costs have increased further since the study was published in Feb 2023)
On top of this, the GL1 study only published before tax numbers. After tax numbers will be lower. So the $2.8bn NPV for GL1 is clearly no longer relevant. If they were to recalculate based on a ~$1,700/T spod price and include after tax numbers, their NPV I'm assuming is closer to $2bn (which would mean they are trading at a higher percentage of their NPV than us)
As you can see from this table:
- The market assigns $11,327 per MT of LRS' JORC tonnage (higher than LTH.v and GL1). However, if I use a JORC tonnage of ~60MT for LRS which could be possible in the upcoming upgrade, we end up at $8,500 per MT and very similar to GL1 and LTH.V
- The market has LRS trading at 14.22% of it's PEA NPV ($3.6bn) (higher than LTH.v and GL1). However, keep in mind GL1's 'actual' after tax NPV is probably closer to $2bn IMO.
- Also, keep in mind GL1's 54MT JORC includes 18MT for a totally separate deposit (Marble Bar) which doesn't appear to have any concrete plans for development.
Whether or not you think LRS is overvalued compared to it's peers depends on whether you think the LRS PEA shows better economics compared to its peers (and also whether you think the numbers used in the various PEA's are still accurate.
The positive for LRS is that we used a spod price of $1,699/T which (so far) is still intact compared to Chinese spot prices.
(20min delay)