Always respect your and @arsenic's views, but considering how...

Always respect your and @arsenic's views, but considering how much I like the Greenbushes asset I find it hard to be excited about current valuation, despite the precipitous fall. At current share price we've got an EV of around $5.0B (I'm zeroing the nickel/hydroxide businesses for simplicity and given the troubles they're having there). The pricing mechanism re-set is a two-edged sword: any recovery in lithium prices will be more speedily realised by the Joint Venture, but on the other hand, if prices stay low for a further 12+ months then earnings are about to come down to earth with a bang, meaning this is still trading on a high multiple.

Very rough calcs: if we take the midpoint of their FY24 revised production guidance, plug in something closer to (but still well above) current spot prices of say US$1,100/t, assume sales of around 80% of production and COGS to stay in line with the past quarter, then you're looking at a forward EV/EBITDA of 18x:



Result: every time this gets bid up to $7.50+ I scratch my head, but then gravity takes hold and back down it comes...

It might be the world's best lithium mine, but as IGO have a non-controlling stake, there's an argument that it should trade at a discount, not a premium, to the other Li players.