Has anyone actually done an NPV calculation to get to a...

Has anyone actually done an NPV calculation to get to a realistic valuation?

The problem I have with Lynas, despite the obvious positive arguments in the REE sector is the bottom line profit isn't very good.

It's not just Lynas it's all of the REE companies. With todays inputs of $11.05 for the basket and 1.11 usd rate I get an NPV/PS of just 40cts. The dillution has resolved the financing but killed the profit potential. Even with a $20 basket and a USD/AUD rate of 1.20 I only get $1.18ps. SO in order to double up in value you need the REE basket to exceed it's record by 30%. And for the $3 mooted above you need the basket price at $40 which is highly unlikely. That's not to say there wouldn't be a specualtive run up if the basket price started to move but on a fundamental basis there just isn't much profit in it.

When they reach full production if they get a basket price of $15 and the exchange rate helps them out a bit they will be making in the region of A$225m a year before tax. The current market cap is A$910m. What price would you put on those earnings. Even at a lofty 10 times it only gives a potential double up. That's not a lot of potential given the fairly big asks in that scenario.

The same problem exists with all the REE companies. REE is a great story but it's pretty hard to see how any money can be made out of it by non-institutional investors. JL was right in his recent article about the sector. It's no surprise there is no real interest in REEs as there isn't much money to be made unless the basket price goes intergalactic.

I'm finding all this a bit frustrating as it's a seemingly good oportunity but with few options to make a worthwile stack.