LG Deal - 19,000 tonnesWe don't know the price of the cobalt sulfate in the deal but after a quick search I found average price out of China is $8,375.-8,512.
Value of the deal at these prices would be: $8400x 19,000 = $159,600,000. Revenue only.
I would assume a discount had to be applied in the deal, and I would also assume it didn't have to be too drastic since ELBM has an offtake agreement for a global distributor for any amount of material produced (that isn't sold), and there are logistical savings for LG to purchase from a plant 4 hours north of them rather than China..... Still, applying a 25% market discount would leave $119,700,000 revenue.
Assume 50% margin = approximately $59.85 million EBITA
# shares outstanding: 35.55 million
Earnings per share = $1.68
P/E = $2.70 SP / $1.68 = 1.6 PE
Not sure what is a suitable PE ratio for this industry, but sinve it feeds EV makers I assume PE would land close to 6-8 after one or two years of operations (by 2026/2027).
Expected ROI (by 2027) = 7 / 1.6 = 4.375 x 100 = 437% / 3 years = 145% simple ROI per year from here up (if financing and the rest of the project execution and operational startup runs smoothly).
Holding long for now.