So do I have this right or just full of it -you be
They likely have a lot of lithium they can produce.
$80 million needed to produce a plant (from past prez's interview).
5000 ton a year plant
a ton lithium in one article said lithium is 10-12k. So we're looking at 5000*11000 revenue=55,000,000 revenue. say cost of product is 50%-- I have no idea (someone fill in the details--I'm just trying to put some numbers to this (I'm a finance guy so that what's I try to do with everything--). Govt. would likely help fund start-up as a national resources). Say 28 million profit. Just for the heck of it let's say by time gets to production lithium doubles. Say 50 million profit. If really rich brine, say they make it 10k ton a year plant 100 million annual profit. (could be 2 million for all I know--somone help with cost of production).
100 million annual profit at 10 times cash flow gives a 1 billion market cap (less debt--let's ignore it for simplicity sake--it works for the govt!) . Question is how much dilution to get you there. 50million shares now fully diluted approx. Ignorning time value to get to full production and earnings with govt. help and such dynamic economic scenario at feasiability bank will loan out all money with no dilution). $10-20 share possible but probably optimistic. Who know what prices of lithium would do --would be nice if had some publicly traded measure.
Of course, a 30% premium to existing price with management golden parachutes would probably take it. Chump change for a lot of companies and countries.
Not trying to discourage anyone but there has been alot of stock bought at higher prices than current prices (current prices have been trending down). A company or shorts could be depressing price to excerberate a tax loss selling frenzy. It's been done before and then take over at a "generous 50% premium". Shorting along with tax loss selling can be profitable in and of itself as people freak the lower it goes. What's the old saying all's fair in love, business, and the stock market. Naked shorting never could occur-could it
They should spin the uranium co. off--many uranium companies going for a low price of $2 per lb of compliant resources--should be more with mills. Maybe a 1 a share here if existing assets fully appreciated. More to the right company.
Someone help me out with the Canada deal, does this sound right.
1% lithium per ton--22-23 lbs. per ton at 5-6 bucks per lb. Say 150 a ton --they can evidently tol mill at some mill nearby at 2600 tons per day. Milling and mining and trucking say half of this. 75 a ton at 2600 tons per day if can get that much capacity and mine flow with open pit. Just say a 100 ton at 2600 tons per day. 260000 profit per day at say 330 day. Maybe 50-60 million cash flow here with taxe--open in all directions it sounds and it could be richer grade.
Heck this could be another $10 a share.
A lot of planning, execution, luck, but could get there.
I'll buy as much as I can buy if anyone is selling at .05 a share--.05 a share Canadian, not US. Of course, by the end of the year, this could be more.
Good luck to all. I've just been throwing out assumptions trying to get my hands around the possibilities--feel free to straighten me out where my assumptions don't make sense. If nothing else, maybe a got a few licking their chops.
Having went through an exercise like this before and having it hit beyond my wildest expectations and then losing the bulk of it all from greed and not having a set sell point--[please don't make the same mistake I did. As a learning when the commodity being produced dropped about 90%, anything can happen and it hurts like hell once you've been on top of the world for a while financially (at least on my humble scale). Love, family, friends, trying to gain innner peace, and a cool beer (ok a few cool beers) help ease the pain. Life goes on. Lesson learned.