The true value of the Sal De Vida Lithium Brine project may surprise some
Galaxy Resources is now regarding the Argentinian Brine as their flagship project. Considered by many, a billion dollar net value is hardly enough to warrant a Title of 'Flagship project' Could the brine be NPV higher? ... Yes.
_________________ The current facts:
-The Sal de Vida Pre-Feasibility Study ("PFS") completed in October 2011 estimated a net present value(NPV) for the project of US$1.07 billion.
-The average operating cost was estimated at US$1,537 per tonne of finished lithium carbonate, generating a net pre-tax cash flow of US$139 million per annum.
-$139million per annum, producing at 25,000 tpa of battery grade lithium carbonate & 107,000 tpa of potash (KCl) by-product for the fertiliser industry.
-The current Measured&Indicated resources statement issued declares : M&I = 4,053,000 Li2CO3Equivalent (tonnes) Inferred = 3,180,000 Totaling: 7,233,000 Million (tonnes)
As of August 5th, Galaxy reportedly disclosed the spot price for Battery grade product was US$7,000/tonne. ($7,000 - $1,537 [operating costs] = $5,463) _____________________ Total Resource Value?
US$5,463(Revenue @ Todays spot prices including operating costs) x 7,233,000tonnes (Total Resource) = $39,513,879,00 Billion = Total resource value. -- $39.5 Billion, NOT including Potash revenue--
$39.5 Billion vs The current Net present value of 1.07billion. Now the 'Flagship' status is starting to live up to it's definition.
At $5,463 x 25,000 tonnes = US$136,575,00 million annually [Li2CO3 only, after operating costs] at todays spot prices without Potash sales.
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Nice week folks- The biggest since November 14th, 2011. While it's enjoyable to see it hit between .65-68 cents;With all do respect, this stock hasn't even begun to move
If another prediction is to be made... It's likely Galaxy Resources will be picked off presumably by one of the three larger players *Cough FMC cough*, before Sal De Vida goes into production -V
GXY Price at posting:
21.9¢ Sentiment: LT Buy Disclosure: Held
