Changes: Had to fix the depreciation, to allow for project...

Changes: Had to fix the depreciation, to allow for project equity partnership. And also changed the conversion factor of spodumene to hydroxide using NMX conversion rates of around 6.5x
Capex for build out also lowered to USD752mio including contingencies (derived from NMX USD616 x 260,000/213,000). Simple scaling up of operations using NMX as a proxy.

*** 40.8mio tonnes total resource with annual run rate of 1.49 mio tonnes @ 75% recoveries achieves  260 ktpa 6%+ spodumene as feedstock for 40Ktpa hydroxide conversion, giving LOM of 27 years

	Column 1	Column 2
0	Hydroxide(t)	40,000.00
1	Conversion Factor	6.50
2	Spodumene (t) 6%+	260,000.00
3	Mined ore (t)	1,114,285.71
4
5	75% recovery (t)	1,485,714.29
6	Resource (t)	40,800,000.00
7	LOM	27.38

After the fix, Target goes to A$8.87 from A$8.02

	Column 1	Column 2
0	James Bay
1	Hydroxide tonnes	40,000
2	Price per tonne (USD) **	16,300
3	Cost per tonne incl royalties and marketing (USD)	4,811
4	Project EBITDA (USD)	459,560,000
5	Controlling stake retained	60%
6	EBITDA attributable to GXY (40% equity partner)	275,736,000
7	AUDUSD	0.73
8	EBITDA (AUD)	377,720,548
9	Interest AUD (USD 0 debt)	-
10	Depreciation AUD with LOM 27 years ***	22,891,933
11	Taxes @ 30% AUD	106,448,584
12	NPAT (AUD)	248,380,030
13	EPS of James Bay project at 420mio shares	0.59
14	AUD Target price per share at forward PE 15x	8.87

**Hydroxide price long term forecast at USD16,300 per tonne


---------------------------------------------------------------------------------------------------------------------------------------

The other numbers in the table comes from:
1. Using NMX's James Bay project as a proxy as NMX has the same grade at 1.40% Li2O (37 million tonnes) and GXY James Bay is also 1.40% Li2O but at a slightly larger 40.8 million tonnes.



2. NMX is using an spodumene cash cost of USD257/t and hydroxide cash cost of USD 2811/t, but it does not appear to have factored in any royalties or marketing costs, thus as a proxy, GXY JB is assumed to work on USD4811/t cost for hydroxide inclusive of royalties and marketing expenses.

3. The Capex is assumed to be USD 752 mio including contingencies (i.e 1.22x that of NMX's USD616 mio capital cost, as NMX is going to run at 213Ktpa spodumene vs. GXY JB at 260Ktpa to accomodate for a 40Ktpa hydroxide converter).

4. The NPV of NMX's project is USD1.7 Bn @ 8% discount and will run at 23Ktpa hydroxide and 11Ktpa carbonate so to be conservative we shall use 1.18x multiple on the NPV.

5. NPV for GXY JB becomes USD2.0Bn.

6. A 40% project partner for JB would then contribute USD800 mio in equity towards the build out. Already enough for to cover total capex. Left over cash to be paid out as dividends.


Thus, the target price for James Bay at 40Ktpa hydroxide production where GXY retains 60% controlling stake is at A$8.87 per share (SDV and MC left out of calculations)

As usual everything above are my own opinions only so please don't take anything I posted as any form of investment advice and DYOR and build your own models as well.

Cheers

Tuna