NICE DAY! Positive stuff today from Couloir Capital Ltd.
Cypress Development Corp. (TSXV: CYP) – PFS Lithium Asset With Robust Economics and Strong Offtake Potential
Investment Highlights
• Cypress Development Corp. (“CYP”, “company”) is a lithium miner with a focus on sedimentary deposits in Nevada. Its Clayton Valley Lithium Project is at the Prefeasibility Study stage and the company is currently looking to build a pilot plant on-site.
• Robust Economics: As per the Prefeasibility Study, the Clayton Valley Project has a 40-year mine life, a payback period of 4.4 years, an after-tax IRR of 25.8% and an after-tax NPV@8 of US$1.05 billion.
• Low Project Value Realization: Despite the strong mien economics projected by the Prefeasibility Study, CYP’s equity valuation is less than 5% of the NPV@8 currently projected for Clayton Valley. Peers with projects at a similar stage are trading over 20% of project NPV@8.
• Supply Offtake Potential: Given precedents including the recent supply agreement signed between Piedmont Lithium Ltd (ASX: PLL) and Tesla Inc. (NASDAQ: TSLA), we believe CYP’s could attract offtake interest in the near-term as counterparties across the electric vehicle (“EV”) value chain scramble to secure long-term supply.
• Based on our analysis and valuation models, we are initiating coverage with a BUY rating and a fair value per share estimate of $2.48 per share.Capital Ltd.