Share
10,630 Posts.
lightbulb Created with Sketch. 4351
clock Created with Sketch. 08/11/17
08:24
Share
Originally posted by pcaruso
↑
CATL is going to IPO without a supply agreement for lithium. They need an agreement ASAP to enhance their value proposition & AVZ will give them significant clout and add billions to their market value. CATL gets AVZ and China controls one of the world's most strategic commodity. As Kristian de Groot says, "it's a no brainer". In fact, CATL executives have almost been living in the DRC in recent months. That said, they will have to fight off other suitors to get their hands on this prized possession. Which only means one thing for shareholders! It also means, there's plenty of opportunity for non holders to buy in as it's not too late. A back of the envelope calculation. PLS has a market cap of $1.5B and yes, they're de-risked and 6 months away from production. AVZ has at least 12 times the resource of PLS which would value it at $18B. OK, let's allow a 90% discount factor for the sake of it - allow for sovereign risk, lack of JORC, infrastructure and mine development cost, ebola, etc etc, it still values AVZ at around $1.8B or $1/share. Is the discount factor too high? Probably, but I'm just being your devil's advocate and also not allowing for the tin & cobalt resource. If some think 30-31c share might be frothy, this baby still has legs and plenty of them. For the record, I watched Fortescue run from 5c to $100 over a few years & Qld Gas (CSG) go from a penny dreadful 10c stock to a buyout at $5.75/share by British Gas. Enough said. Enjoy the ride if you're holding. If you're not, still plenty of scope left to make some serious coin. Just my humble opinion & not a recommendation per se!
Expand
If AVZ has 12 times the current resource of PLS, (still to be proven) that would mean they have 12 times mine life of PLS, with a 5 mt pa mine.. That gives them spod for over 100 years...! Why would you need lithium for that long?.. Your 90% discount factor should take in consideration that Lithium will probably be replaced in the next 15-20 years. So no point having mine life beyond that IMO.
This thread is closed.
You may not reply to this discussion at this time.
