CRE valuation compared to other lithium companies This week I am reposting all the comparaisons CRE vs many lithium companies that I have made in the last 2 weeks. There has been some moving in prices since so the evaluations differ a little bit from what is presented here. I didn't change the calculations. I think I will publish on time to time this post so that new comers on this board can see it. Cheers !
MILLENNIAL LITHIUM VS CRE
Millennial Lithium (Brine) CRE (Hard Rock)
Production 24 000 TPA LCE 29 000 TPA LCE
(Y1 - 16 000 TPA, Y2-Y6 21 000 TPA
Start commercial production
2024 2022
Market Cap (115 M shares fully diluted) 201 M FD
540 M$ (including issue today) 270 M$
Initial CAPEX 565 M$ CDN 341 M$ CDN
NPV (8%) after-tax 1 300 M$CDN 726M$CDN
LCE price used for FS
13,199 $ 10 000 $
New issue of 30 millions $ at 4$ 15 Millions$ at 1.10$
stock was 5.21$ before News 1.30 $ before News
Discount of 23% Discount of 15%
Other Projects : 1 Rose + 8 projects
It is easy to see why we are worth double our actual price (2.70 $).
If CRE uses 13 199$ as ML for their NPV calculations,
CRE valuation would be probably around the same as ML.
Also, interesting that both are issuing new shares with Cantor.
CRE issue an half warrant with premium of 59% for the exercising price and
ML issue a full warrant with a premium of only 20%.
You see the discount to the share price is lesser for CRE.
OROCOBRE VS CRE
Orocobre (Brine) CRE (Hard Rock)
Production Now12 000 TPA LCE 29 000 TPA LCE
(Phase 1 objective of 17 500 TPA
attained only 12 000 in 5 years.
Phase 2 25 000 TP in ramp up from 2023
to full production in 2026
Start commercial production
Phase 2 2023 2022
Market Cap (345 M shares fully diluted) 201 M FD
2 000 M$ 270 M$
Phase 2 CAPEX 410 M$ CDN 341 M$ CDN
If Orocobre is worth 2 B$CDN after 5 years of producing 12 000 TPA
although their target was 17 500 per year, problems with Argentina's economy,
only 22% battery quality lithium...I wonder why we have a value of 270M$CAN.
We are worth more than that. Orocobre will have the same production as CRE in 2025.
You could say that they have reserves for 40 years, but the important thing to
underline is that we should value on production in the next few years and that
CRE will upgrade its resources before 2025.
PIEDMONT VS CRE
Piedmont Lithium (Hard Rock) CRE (Hard Rock)
Production 22 720 TPA LiOH 29 000 TPA LCE
Start commercial production
2023 2022
Market Cap (13 M shares fully diluted +) 201 M FD
625M$ 270 M$
Initial CAPEX 470 M$ CDN 341 M$ CDN
NPV (8%) after-tax 900 M$CDN 726M$CDN
to 1 400 M$CDN
LiOH price used for FS LCE price
12 910 $ 10 000 $
Piedmont has more MICA, IRON (impurities) and recovers less Lithium than CRE in tests.
We should be IMO worth about the same as PLL - meaning 3$ per share for CRE.
NEO LITHIUM VS CRE
Neolithium Lithium (Hard Rock) CRE (Hard Rock)
Production 20 000 TPA LCE 29 000 TPA LCE
Life of Mine 35 years 17 years (expandable)
Start commercial production
2023 2022
Market Cap (13 M shares fully diluted +) 201 M FD
405M$ 270 M$
Initial CAPEX 400 M$ CDN 341 M$ CDN
NPV (8%) after-tax 726M$CDN
to 1 400 M$CDN
LCE price used for FS LCE price
11 882 $ 10 000 $
Neo Lithium has the lowest impurities for a Brine project.
They still have to do a DFS and obtain permits.
We should be IMO worth about the same as NLC - meaning 2$ per share for CRE.
If we take Prodution (29k vs 20k), valuation of 2.70-3.00$ for CRE.
STANDARD LITHIUM VS CRE
Standard Lithium (Brine) CRE (Hard Rock)
Production 20 900 TPA LCE 29 000 TPA LCE
obtained in 3 phases
add 30 000 TPA later
Life of Mine 25 years 17 years (expandable)
Start commercial production
2023 (new process) 2022
Market Cap (162 M shares fully diluted) 201 M FD
664M$ 270 M$
Initial CAPEX 550 M$ CDN 341 M$ CDN
NPV (8%) after-tax 726M$CDN
1 150 M$CDN
LCE price used for FS LCE price
13 550 $ 10 000 $
Standard Lithium has a new process for Brines in Arkansas.
It has to be proved economically at a big scale.
We should be IMO worth about the same as SLL - meaning 3$ per share for CRE.
ROCK LITHIUM VS CRE
Rock Lithium (Hard Rock) CRE (Hard Rock)
Production 15 000 TPA LCE 29 000 TPA LCE
Life of Mine 20 years 17 years (expandable)
Start commercial production
2023 2022
Market Cap (66 M shares fully diluted) 201 M FD
430M$ 270 M$
Initial CAPEX 550 M$ CDN 341 M$ CDN
NPV (8%) pre-tax after-tax 726M$CDN
425 M$ CDN
LiOH price used for FS LCE price
14 612 $ 10 000 $
CRE is definitely worth more than RCK - meaning at least 3$ per share for CRE.
LITHIUM AMERICAS CORP VS CRE
LITHIUM AMERICAS (Brine) CRE (Hard Rock)
Production 20 000 TPA LCE PROJECT 1 29 000 TPA LCE
60 000 TPA LCE PROJECT 2 - 2 phases project
Start commercial production
2022 (1) 2023 + (2) 2 phase project 2022
Market Cap (115 M shares fully diluted) 201 M FD
M$ (including issue today) 270 M$
Initial CAPEX 565 M$ CDN 341 M$ CDN
NPV (8%) after-tax 3 600 M$CDN 726M$CDN
LCE price used for FS
12,000 $ 10 000 $
Other Projects : expandable Rose + 8 projects
LAC = 79 600 TPA vs 29 000 TPA for CRE. Production = 36.5%
36.5% of LAC NPV = 1.3 B$US
If CRE uses 12 000$ as LAC for their NPV calculations,
CRE valuation would be probably around 6$.
Galaxy Resources vs CRE
GXY has 3 projects
Australia - Mt Cattlin - Mature 7 years of production left.
Argentina - Sal de Vida - 40 years Mine life beginning ramp up in 2023 with 3 phases development
Canada - James Bay (about same distance from Rose that NMX from CRE - 50 km NW)
Mt Cattlin (Hard Rock)
They produce (Mt Cattlin) for the Chinese and they have a lot of relations with them selling
all their Spodume concentrates to them. Grades at 5.95%.
Mt Cattlin represents about half of CRE in terms of reserves and resources.
Only 7 years of production left. Lately they released an update on operations.
They lost money in 2020. Lithium price, Covid, lower grades (5.95% instead of 6%+).
Sal de Vida (Brine)
GXY CRE
NPV after tax 1.85 B $ CDN 726 M$ CDN
LCE price used 13 911 $ 10 000 $
CAPEX 600 M$ CDN 341 M$ CDN
IRR 26.9% 34.9%
Using the same LCE price for CRE would give a NPV of 1.5B$ probably.
Also, they have problems with Magnesium impurities to have battery grade quality.
Let's say that Sal de Vida is 1.25 X CRE
James Bay
PEA coming this Quarter.
About the same Resources as CRE but no PEA. They present this project as a source of Lithium
for North American and European markets.
Let's say that James Bay is the same value as CRE.
When we add 1X + 0.5X + 1.25X = 2.75X, let's round to 3X CRE.
At 2.10$ US , GXY maret cap is worth 6X CRE market cap. instead of 3X
Again we are worth 2X the actual price.
As I was making my studies, I was pretty surprised how the other projects were not that great.
Some are not as advanced, some have long ramp up profile to achieve CRE production target and some have to prove their concept. At large scale a new concept working in laboratory doesn't work out as planned and the economics can break the project.
The price of Lithium going up makes all of the stocks go up. Some projects will never see the day. Some projects will have problems in execution. Some will go under.
One thing that I am sure is that I am safe with CRE compared to others because of their conservative approach, concentration and carefulness on execution. They will use a proven process to extract lithium and make Hydroxide Lithium. No proof of concept to be done here, unlike Nemaska...
Nemaska and Canada Lithium did hurt our project becuse of poor execution. When Guy Bourassa was "hot" he used to bash our project. When NMX went down so did CRE. Double whammy.
Right now we could double and only be at the same level as the others.
Lithium will continue its way up so all the stocks prices. And CRE will be in the same train.
In a couple of years stocks will be trading in tandem with their financial results.
Mining Lithium is complicated and the numbers are not always like they were supposed to be.
With Doctors Haber and Brune on board having managed Rockwood and many lithium projects we have the knowledge for managing all our lithium projects. Marc Simpson has oversee mining projects from exploration to production. Jean-Sbastien will oversee the exploration development. Eric has the merits of knowing what analysts are looking for and will promote CRE. Matthew Lauriston Starnes has the capacity to oversee all the legal aspects of deals to be signed or not. Charles B. Main and Nathalie Laurin will control the finances.
Definitely a great project, a great team and lots of fun ahead.
Cheers