Well worth following Rodney Hooper and Howard Klein on twitter....

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FrankRockefield

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28/09/20

19:08

Post #: 47687867
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Originally posted by FrankRockefield: ↑

Thought I would share some publications around PLL and why we are still significantly undervalued and why we are setting up to be the next KDR.

Piedmont Lithium (“Piedmont”) is a unique lithium play located in the tin spodumene belt (“TSB”) in North Carolina (“NC”), USA. It is unique, given its proximity to infrastructure and easy access to experienced and low-cost labour and energy. Also, Piedmont’s after tax free cash flows will benefit from resource depletion allowances and low state and federal tax rates. These metrics compare very favourably to Piedmont’s Western Australian (“WA”) and Canadian peers that face high royalty and ad valorem/tax rates and elevated input costs. Piedmont’s superior positioning on input costs, skilled labour and tax fronts more than offset for its average orebody head grade and high strip ratio

The investment thesis in favour of Piedmont is clear; while one would not expect superior operational performance (recoveries, percentage of productionthat is battery-grade etc), Piedmont’s operational costs to deliver the same performance/product as its peers are far lower, and the beneficial depletion allowances, depreciation method and lower state and federal tax rates result in a superior net present value (“NPV”) and after tax internal rate of return (“IRR”).

Piedmont offers superior returns to its WA peers and based on conservative operating performance assumptions and a required after-tax IRR of 15%, is worth +- 0.60c to an incumbent, approximately four times the current share price. but battery-grade lithium hydroxide is growing by 40% per annum between 2018 and 2025.

Based on certain conservative assumptions, one could expect to see Piedmont still offering value up to 0.75c/share to an incumbent/acquirer targeting a 15% after-tax IRR as compared to the current share price of $8.00.

Source: RK Equity (R.Hooper), well worth the full read: https://60909e46-79bd-4fe7-9a09 bec8eb48ffa9.filesusr.com/ugd/affbaa_00dc94fdb4de4191a7090e938397e962.pdf

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Well worth following Rodney Hooper and Howard Klein on twitter. They were the ones that brought PLL to the surface for me in 2019.

PLL Price at posting: 27.5¢ Sentiment: Buy Disclosure: Held
7 Upvote

0 Great analysis

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