reasonable point nrc. they overpromised earlyand have had their...

reasonable point nrc.
they overpromised earlyand have had their tail between their legs ever since.
hence im not so much interested in following their guidance as gospel, rather i am trying to work out what i think are reasonable targets for output, costs, sale price, margins etc. this requires a degree of reliance on company data, but a lot of it such as price is out of their control.
i think despite the teething problems inevitably associated with being an industry trailblazer in developing their brine pond mines, they will continue to make slow progress towards nameplate. at some point the fear that there will be an oversupply will shift to the realisation that they are nearing nameplate and that lithium prices are booming and that new supply is slow to come online.

this makes ore nearly at an inflection point in sentiment in my mind, it is merely a question of whether they can execute well enough this financial year to build investor trust lr whether it takes another 6-12mo.

the huge positive cashflow and gross margins will start to speak for themselves soon enough.

to answer the other question from porker about noat being the big driver, i disagree. although this is usually a key measure of valuation for a mature business, for ore their key measures are annual output, price per tonne and gross cash costs per tonne, as well as admin/ general costs plus exchange rate plus debt plus the cost estimates of phase 2 and the liOH plant. the other factors that matter are cash on hand and available debt facilities

the reason why all this matters more than npat, is that this will be used to determine whether they can start the phase 2 expansion which is what will unlock the maximum long term earnings potential of ore. the liOH plant will also add long term eps value.

so you see ore is more like a xero or aconex in terms of the stage of its maturity it is in as an earner. its bottom line npat will be lower because its gross profits will instead be reinvested into phase 2 and the liOH plant.

the obvious difference between someone like aconex or xero is that they have a differentiated product as a price maker and can afford to sacrifice short term earnings while they build long term market share and a moat. ore on the other hand is a commodity miner of a vastly available commodity, so even though they are at the lowest end of the cost curve, they need to execute ohase 2 and the liOH plant asap to take advantage of high lithium spot prices which could be significantly lower in 4-5 years time depending on the supply and demand equation then, which is impossible to predict with a high level of precision.

hence, in conclusion, if ore can execute phase 1 asap and get phase 2 underway sooner than later, the multiplying effects on earnings 2-3 years from now are massive.