RE:since we talking valuationsupersceptic wrote: New NPV will likely to be 2B, assuming bad market condition - 10K/tonne of Li.
It is 1.2B now at 11K, before 30% resource expansion and 20% cost reduction...
You did a good job of showing how there could be a lot of value here, as long as the NPV climbs dramatically.
Let me play devil's advocate. The spot price of lithium could crash in 2019 to $6K. I don't think that is sustainable because EV sales will reach very high numbers by 2020-to-2023, but even then at some point later in the 2020s supply will catch demand and price above $10K/ton is probably not a sustainable thing over a 20-year time horizon. So if I am a provider of capital, and the market price of the commodity is heading lower, I am going to use all of these points as my negotiating leverage to get what I pay for the investment much lower. In a market with a high commodity price, I have no way to play that game. I have to pay what the market values the stock at, as a minimum.
At a resource price of $6K, your new model puts NPV at $797M instead of $2.6B. I do not believe $6K/ton is the right number, but the point I want to make is that the NPV is incredibly sensitive to price assumptions for the commodity. Losing 50% in commodity price smashes the NPV by 70%.
Commodities is a brutal game to play. You have to catch the wave where the commodity price is rising. Falling commodity prices usually result in shockingly low prices for the companies selling the commodity, particularly for juniors.