https://seekingalpha.com/article/4513028-piedmont-may-emerge-as-a...

https://seekingalpha.com/article/4513028-piedmont-may-emerge-as-a-leading-lithium-conglomerate-in-next-5-years







According to my sum of parts in Figure 1, the combined value of PLL’s assets – the NPVs of their Carolina projects, current cash reserves, their equity stakes, Sayona and Atlantic, and their stakes in the projects in Canada and Ghana are valued at $5.795bn. This is a conservative number for the following reasons: 1) NPVs for all three companies at lower than current lithium prices. For the Carolina project, the assumption is $1,200/tonne concentrate, compared to current spot prices of over $5,000/tonne. 2) The considerable value of the offtake agreements has not been factored in 3) We are still awaiting the release of an NPV for the Sayona Quebec project, including North American Lithium, so this potentially large number has just been left out of the calculation. Another useful reference point on valuation was a recent transaction announced by Livent (LTHM) on 2 May under which Livent doubled its stake in Nemaska Lithium (OTC:NMKEF), a project to develop a fully integrated lithium mine and lithium hydroxide extraction plant in Quebec. Livent’s payment for this second 25% stake values Nemaska at $1.5bn. This transaction is highly relevant to PLL, because of the many similarities between Nemaska and the Carolina projects. The two projects are similar in size: according to historic records (the numbers in Nemaska’s case may change as its new owners evaluate it), Nemaska’s total resource of 50m tonnes grading 1.4% compares to Carolina’s 44.2m tonne resource grading 1%. Both have anticipated similar future production rates (250,000 tonnes of concentrate at Nemaska and 242,000 tonnes of concentrate at Carolina), and the capital expenditure to develop these similar-sized operations will likely be similar. The significant differences are Nemaska’s more advanced permitting status, its larger and higher-grade resource (and hence longer mine life), and Carolina’s lower labour, transport, and general operations costs reflecting its less remote location. Notwithstanding the differences between the Nemaska and Carolina projects listed above, a major lithium player is purchasing comparable assets to Carolina at this valuation of $1.5bn, which is considerably more than PLL’s total market capitalisation today.