Post by
trader53 on Nov 10, 2024 3:35pm
When will the re-rating take place?
It's very clear that the market does not understand the value of the planets only high-grade cesium resource, and this should surprise no one. There are many questions that remain unanswered in order to shine a light on the value of this resource. This is far from your typical explorer story. I am a firm believer in the Lassonde model and PWM is one of the few explorers that does not fit into this model. The discovery phase of the model is one of the most volatile moves for a junior. With so little known about the cesium market its difficult to build excitement.
My guess if one could accurately convert the real value of cesium into the gold equivalent status the Market Cap of PWM would be multiples higher than it is today. Add to this the fact that this resource will yield three payable minerals with proven very positive separation and metallurgical results along with a proposed timeline of production by early 2026. This is where PWM does not fit into the Lassonde modelling as it has one foot in the discovery stage while the other foot is in the mine building stage and the market is not quite sure how to square this. I have been saying for months that PWM SP will rerate at some point and it's difficult to determine what the catalyst will be to cause this rerating. My guess is one of three events would cause this rerating.
1) A Strategic Partner who will be interested in not only the offtake of minerals but also has who has the expertise to take Case Lake into production. My guess is this partner will have the Cesium expertise along with the infrastructure already in place to convert the cesium. When a CEO refers to the interest as being "intense" and from "multiple sources" I have to believe that an announcement of a strategic Partner is in the works.
2) An MRE combined with potential for substantial growth.
3) A PEA based on the MRE along with a clear statement of moving into production.
My preference would be the strategic partner announcement before the MRE and the PEA as that would tell me the partner has already done their estimate of an MRE along with a PEA which would send the market a very bullish signal. I believe that PWM will keep drilling early in 2025 as it appears that they are discovering more cesium, lithium and tantalum than expected. I fully expect that the PEA will be the catalyst to drive the returns into life changing status. Please keep in mind these thoughts are coming from someone who could not be more bullish and sees the PWM risk reward profile as being spectacular. Please do your own DD.