RRS - LTR Presenting Brisbane/Sydney/Melbourne, page-18

This is copied from Pokerface on the PLS site, it's interesting to see the valuations of our Australian peers in the Hard Rock sector, Buldania is looking like it will be up there with the best of these deposits.

Unsure if Pokerface still holds Ltr, however I remember it was his initial posts and his contacts regarding B that first alerted me to the special ground they hold at Baldania. A big thank you P.

The Wodgina deal re-started the sector interest, in my view. Essentially, Albemarle are paying $1.6bA for 50%, of an undeveloped site/project, however from those proceeds MinRes have to fund what is equivalent to a PLS Stage II plant- so perhaps $500mA??. However, bear in mind, they will own 50%. So, the deal at Wodgina perhaps equated to a value of say $1.35b for 50% of an undeveloped project or $2.7b for 100%.

If it’s $2.7b for an undeveloped project, surely it’s closer to $3.5b for a fully functioning Stage 1 project with sales in place.

What KDR have is less than Wodgina and Pilgangoora, in my view and the view of other experts I talk with.

So $3.5b is about $1.90 for PLS.

To me that’s base case value.

The potential for value appreciation is far greater than that, because that is just Stage 1. We know there is Stage 2 and Stage 3, plus the very value accretive down-stream opportunities. PLS has done all the hard yards!!!! Listen to what the Chairman at KDR is saying- effectively let’s take the money, because going through the development pain is just not a fun idea. PLS has been through all that pain, and that is worth a lot.

In my view it is not a stretch to argue that PLS is worth $5b today, or about $2.75, with further upside as development progresses. I start with the base case value, and then add for future expansion opportunities and downstream opportunities and very importantly the huge potential for resource growth and Mine Life growth. This may be a 100 year mine!!!

Yes concentrate prices have come back, but there is well- founded argument that those prices will head back up later this year and into 2020 as the downstream bottlenecks sort themselves out. And always in the back of my mind is the potential size of the PLS resource- think 500mt to 1 billion t!!! Speculation perhaps, but I have spoken with the Geo’s since 2015- “we have barely scratched the surface”- those words ring in my ear.

So, if RIO or some other goliath come along, let’s not be thinking that a dollar is good. That would be a tragedy. And I know that KB and the Board are very aware of the asset and potential!!

Stay calm folks. I sense things could get interesting in the next few weeks and months. “Armagedon for those pesky shorts”- perhaps.