I chose this thread because it seems more relevant to talk about...

I chose this thread because it seems more relevant to talk about fundamentals on this on than the chart thread.

In case Tran's post gets moderated, here is the post @surfarosa was talking about regarding a potential AU$3-4B MC:

This is quoted from a comment by Tran:
Tran
389 posts.
21/10/17
00:50:43
Post #:
28080816
New
"Share price is always a reflection on expectation of future production and profit, not current ones.

Don't forget that GXY has done a revised DFS on their Argentinian brine lithium project SAL DE VIDA (SDV) about 14 months ago and its NPV = $1.4 billion alone (at 8% discount), and if taking into account the surging price of lithium over the last 14 months and over the next 5 years, its NPV could well be around $2billion. And that is only for SAL DE VIDA.

For its James Bay lithium project, with its latest drilling update just 2 days ago with some very impressive hits of more than 80m thickness and more than 100m thickness of around 1.56% lithium, JB is turning to be quite substantial resource for GXY.

They are also working to bring their recovery from 61% to 75%-80% and this means their cash cost may be much lower than current US $320/ton. I would not be surprised to see their cash cost reduced down to $270-$280 in the next few quarters. They are targeting production of 200000tons/year. Plus, their next contract price for 2018 seems easily to be more than US $1100, given that TAW already locked in their off-take price at around US $1040 about 6 months ago if my memory is good. This would transpire into very significantly higher profit for their Mt Catlin operation in the years ahead.

200000 tons * (US $1100 - US $280) /0.78 (exchange rate) = about AUD $210mil EBITDA
If the market give it a PE of 10, that would give it a MC = $2.1billion AUD
If the market give it a PE of 15, that would give it a MC = $3.6billion AUD.

Now, add in NPV value of Sal Di Vida of $1.4billion-$2billion, and
add in value of James Bay = approximately few hundred million dollars.

All in all, I would not be surprised to see GXY reaching MC of $3billion-$4billion (and rightly deserves so) in the next 12 months once they get a partner for their SDV project and lock in some off-take agreements and some funding. Give it 12 months or so to execute on their plans and ambitions and the MC will take of itself."

My opinion on this is
AU$4B MC I think is more of a 2026+ ambition as this has factored in proven operational costs, margins and assumed holding value. I think AUD$3B is probably going to prove a more reasonable target for this timeframe but I would absolutely love for it to go to $10. If it does do that in 12 months I pledge to personally shout everyone who likes my post here a beer.

As for the short term, I'm guessing the SP will bounce around between $3-$4 for a while before breaking out late Dec/early Jan. But that is a guess based on capping the MC at 3B in 2026.

GLTA