Valuing a stock on "what is in the ground" is completely...

Valuing a stock on "what is in the ground" is completely ridiculous, and something that inexperienced investors usually try and use to make large price targets. I was once invested in a stock (NKP) that had an in ground Platinum value of over $100 Billion, do you think that NKP ever turned into a multi Billion $$ company based on its in ground resource? No, they ended up with a market cap of less than $50 million.

Mining companies will be priced partially on their resource (LOM), but more importantly on grade, costs, production, etc.

IMO, once you get to the point of having one of the worlds largest resources, why would you choose to spend more shareholders money, and dilute the company even further just to get an ever larger resource, when this is something that can be done at a later date if needed?

To be quite honest, as I have stated once already, the market cap is still way overcooked for a company that is yet to even complete their DFS. The last capital raising was for $100 million, and that is just for the reasons listed below.

The proceeds of the Placement and the SPP will be used for the following purposes:
To accelerate drilling to increase Resources and Ore Reserves;
To complete the Pilgangoora Definitive Feasibility Study (due early Q3 2016);
To progress discussions with potential customers to convert the MOU’s already in place into
binding off-take agreements;
To place orders for long-lead items and progress project early works; and
General working capital purposes.

There will be a very real need for more capital when the mine actually gets the final go ahead, whether it be through cap raising or partial off take agreements, either way, these two things will dilute the company further one way or another.

I mean can someone explain how they are coming up with their valuations here? I have seen $6 and $10 thrown around pretty often, with what looks to me, to be hopes, dreams and guesses?

I totally agree that right now, Lithium is white hot, and PLS looks well placed to run a profitable operation at some stage, but with hundreds of millions of shares about to hit the market the valuations I am seeing, and the current market cap is off the charts imo.