At risk of enraging 2ic (although I do look forward to his...

At risk of enraging 2ic (although I do look forward to his response).

SFX $155m (346m shares on issue x $0.45) versus STA $655m (1.245bn shares on issue x $0.525)

STA price one year ago was $0.19 with market valuation of $200m - now up 225% to $655m

If SFX follows same development uplift in market capitalisation over next 12 months it will be valued at over $500m or $1.45 per share

• Both projects in Western Australia
• Both have very similar attributable post-tax Net Present Values (arguably SFX has used far more conservative assumptions ie. AUD/USD rate 75c vs STA at 70c, the difference of which could add an additional $250m+ to Thunderbird's NPV)
• Could therefore reasonably justify same market value when both in production, in which case SFX would have a share price of $1.90 based on STA's current market cap of $655m and SFX shares on issue of just 346 million shares.

So why such a big difference in current company values?

Someone recently suggested to me the incredible disparity in the market's valuation is potentially explained (but not justified) by the following factors:

• STA announced Coburn is now ~90% complete with first production expected next quarter
• SFX announced Thunderbird is now ~40% complete with production expected Q4 2023/Q1 2024 (so roughly 12 months after STA)
• STA perceived to be less reliant on Chinese customers/partner (although being reliant on Chinese never seemed to be an issue for Andrew Forrest and Fortescue and his ability to collect multi-billion dollar dividend cheques each year)
• SFX have $40m cash but after making the final $36m equity contribution to KMS JV will be left with $4m and perceived to be wanting to strengthen their own balance sheet (important to remember that cost structure of SFX going forward will be minimal with KMS wearing Thunderbird project costs)
• SFX waiting to announce completion of final documentation with Orion for US$110m facility expected in coming weeks
• SFX yet to announce FID also expected in coming weeks
• SFX does not have the same broker research coverage from the likes of Shaw & Partners, Fosters Stockbroking, Euroz Hartleys, Morgans Stockbroking due to not needing to raise a large amount of equity anymore to fund project completion

Here's an interesting performance comparison chart to leave you all with. STA vs SFX