Math app and estimationThis follows the publication of drilling results on January 16 as well as the compilation of these results for the whole of 2023 available in the company's press releases that I have decided to exercise an estimate of the quantities of resources available on the JackPot deposit. ( only Main Zone ) It is important to clarify that I am neither an engineer or a geologist and even less employed by the company. I'm just a simple investor that I decided to analyze the results of drilling for the current year. This analysis is mainly based on logical and mathematical principles. It takes into consideration the area drilled, the number of holes, the depth, the principles of the ores to tonnage conversion table, the mathematical rules as well as the comparison with peers and stock markets. Thus, at the end of this exercise, I come to the conclusion that the company will record very interesting results with a significant increase in the tonnes of lithium ore. An increase which should triple and indicate more than 7 million tonnes. In fact the results of the estimate I made represent 7.1 million tonnes with a concentration of 1.07 Li2O. In my opinion, an exeptional increase will be announced in the next update by certified engineers. This estimate is based on logic and I think the company will triple the resource.
Now it's time to determine whether this company's stock is devalued or at fair value. In order to make a fair analysis of the stock price, I tried to make some comparaisons with my industry pairs. To do this, I used two companies that want to convert lithium into battery-grade spodumene, although I doubt the company actually wants to convert lithium. I think Imagine Lithium wants to mine minerals for third parties first. Probably in partnership with another company. I believe there is a much greater business model opportunity in shipping minerals directly to local converters. Even though there are few of them, they have already started discussions with Rock Teck in order to develop a business model with their direct neighbor. 20 km separate the two deposits and the planned conversion plant. A story that is definitely worth following in my opinion.
Now here are my two comparison with some peers.
Criticals Elements with 26.3 million tons of ores with a grade of .87 Li2O
203,765 tonnes of spodumene concentrate projected annually
Mining cost of $ 81.30 per tonne
Spodumene concentrate processing cost $ 587 per tonne
$ 471 million processing plant and mine cost
with a Market Cap of 143 million
Frontier Lithium with 29.7 million tonnes of ores with a grade of 1.34 Li2O
with a Market Cap of 155 million
In conclusion, although the comparaison with third parties cannot be applied due to different operational objectives, it will be interesting to see what the market cap of Imagine Lithium will be a significant increase in the quantity of ores indicated in their report 43-101 projected. Let's just imagine a joint venture with their neighbor.
I'll let you draw your own conclusion with the 2023 drilling results !!!!
Good Luck To All Investors