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here's an interview from may ( financing ) 23 min on:-
https://youtu.be/eA1cuT6z1SA
Lithium prices surge to fresh highs
https://www.mining-journal.com/research/news/1419700/lithium-prices-surge-to-fresh-highs
Firebal, EMH don’t need capital raise IF EMH have 2 2 offtake with partial prepayment beofre construction decision.
If not, we will have to raise cap
EMH will have no choice once they have any offtake agreements....they will have to announce to the market any material changes - rules of being listed. ATB
That's a nice £108k buy after the uncrossed trade end of day :-)
If they don’t need to raise capital, then presumably they don’t need to announce any offtakes? I.e. offtake announcements pump up the share price, so they can release new equity at a higher valuation and therefore less dilution. If no dilution needed, then no pressure to announce anything…
Yes - an appropriately timed release / explosion would be much better....
As long as nothing premature occurs.
The foreplay here has been very hard work at times but not long now for an incredible rewarding climax. HODL
Totally agree Arnaud , if we get two offtakes , with one year prepiad , we may not need to raise or very little for capex . The difference i have with you , in the next six months news flow , increasing price of Tin and Li and and offtake in bag our raise if it were required would be somewhere north of $7.50 a share ie 4 pound .
Assuming 1.2B USD for the 50 kpta Capex (which is 20 % more than RK Equity estimate to provide for unexpected increase of cost or extra construction cost)
100 m USD grant form EIT/EBA
120 m USD from european recovery plan marked on Babis 10 item plan (but babis is old story now)
840 m USD soft loan (70 %)
Balance is 140 m USD to share between CEZ and us.
So 60 m share around current level. This number was initialy suggested by Rodney Cooper (RK equity report)
But should Offtakes be signed before construction with partial prepayment and we could have no more cash to put in.
Therefore my valuation is conservative :
- for the 60 m share/ 70 m USD cap raise (ie 1.15 USD/ share) that might not be necessary
- for the 2024 25 ktpa fair price at 70 % NPV
- for the 2024 50 ktpa fair price at 1.8 time the 25 ktpa fair price
- for the 2028 150 ktpa 2.5 times the 50 ktpa fair price
arnaud what price was your assumed cap raise for capex ?
Thanks for reminding me I haven't updated WHI's sensitivity extrapolations for a while @ArnaudC06!
https://www.lme.com/en/Metals/EV/Lithium-prices
===[
Lithium hydroxide weekly price
Fastmarkets MB lithium hydroxide monohydrate: min 56.5% LiOH2O battery grade, spot prices CIF China, Japan and Korea, $/KG.
Date Price (US$ per kilogram)
15 October 2021 22.50
8 October 2021 21.50
]===
As we know WHI in February estimated a risked "today" fair value post-tax NPV8 of 129.8p/sh based on conservative life of mine inputs, namely: $12,500/t LiOH, $21,000/t tin, 50% probability the project makes it to full production, and 10% probability the size of the project doubles from year 5:
"Lithium development on track in the heart of Europe" (09 February 2021)
https://www.europeanmet.com/wp-content/uploads/20210212-FN-EMH-090221.pdf
From table 1 it's easy to see that once expansion plans are announced and the 10% goes to 50% that the 129.8p/sh goes to roughly £2 per share. These estimates are based on the now apparent conservative Lithium and Tin prices.
The sensitivity graph in figure 5 shows that roughly for every 20% increase in the lithium price the NPV of the project increases by 50%. This means that if today's spot (80% higher than WHI baseline of $12.50/kg) were used their post-tax NPV8 of an expanded project would increase to roughly £6/sh (£2 + (£2 * 4 * 50% )). And for those that like to use the fully derisked DCF value that's £12/sh. This doesn't take into account the increase of Tin prices approaching £40,000/t in recent times.
I make it that a 74p per share EMH is 6% of a fully derisked expanded spot based lithium post-tax NPV8 of £12 per share.
The Cinovec project is particularly sensitive to lithium prices. Just how high will lithium prices continue to rise? If negotiations are yet to be finalised I'd wager someone will blink soon! ;-)
Although it's unlikely lithium and tin prices will remain this high for the life of project, it is however possible that above $22.5/kg could be the new normal for the rest of the decade. Impossible to tell really - futures already increasing beyond this to $26/kg out to a year:
"Lithium Hydroxide CIF CJK (Fastmarkets) Futures"
https://www.cmegroup.com/markets/metals/battery-metals/lithium-hydroxide-cif-cjk-fastmarkets.quotes.html
===[
JUL 2022 25.23
AUG 2022 25.65
SEP 2022 26.05
]===
Corrections appreciated!
Ob.
Here is my valuation Model for EMH
As of 18th October 2021
NPV on PFS : 1.1 B USD, EMH share 49 % = EMH/NPV 539 m USD
Current Fully Diluted Market Cap : 190 m x 0.745 GBP = 194.4 mUSD = 36 % of EMH/NPV
Current value : Hydroxide @ 24 USD/kg, Tin @ 39 USD/kg
PFS value : production : 25,267 tpa, Hydroxide @ 12 USD/kg, Tin @ 22.5 USD/kg
Tin credit :
on PFS : 1,441 USD/t LCE, Tin price + 73 % since PFS -> updated tin credit : 1,441 + 73 % = 2,493 USD/t LCE
Opex before tin credit on PFS : 4,876 USD/t, with updated tin credit : updated OPEX 2,383 USD/t
Updated Ebitda
=> updated Hydroxide price - updated OPEX => 24,000 - 2,383 = 21,617 USD/t
Production 25,267 tpa => 25,267 x 21,617 = Updated Ebitda 546 mUSD
Ebitda on PFS : 216 mUSD -> updated Ebitda = PFS Ebitda x 2.53
=> Updated NPV = PFS NPV x 2.53 = 2.78B USD
EMH/NPV = 49 % x 2.78B USD = 1.36B USD
Should we consider emission of 60 m new share for capex partial financing -> 190 m -> 250 m shares fully diluted
Start of production scheduled 2024
Fair Value 2024 25 ktpa = 70 % EMH/NPV = 952 m USD / 250 m share = 3.81 USD = 2.77 GBP
Fair Value 2024 50 ktpa -> 5 GBP (x 1.8 25 ktpa NPV for additional capex and additional risk)
Fair Value 2028 150 ktpa -> 12 GBP (x 2,5 50 ktps NPV for futher risks)
Standard Lithium partner Stellantis does US deal with LG, one hour ago. M&A may well be just around the corner as Shell, BP EXXON etc realise they have to change and fast....watch this space. Same with hydrogen.
https://www.autocar.co.uk/car-news/industry-news-tech%2C-development-and-manufacturing/stellantis-partners-lg-new-ev-battery
in 2011 tin peaked at $33,000 a tonne if you consider prices double every 10 years pending on inflation , Tin could still peak at $66,000 a tonne and at Tin $76,133 a tonne our lithium comes out of the ground for free .
in 2013 : Not much tin supply in Europe either .
Tin Supply (by Country)
China 45%
Indonesia 30%
Peru 11%
Bolivia 5%
Brazil 4%
Rest of World 5%
Little bit higher sivad :
TINCommodity
38,925.00+1,052.00+2.78%
Official Close 10/15/2021MI Indication
Am I correct in calculating tin value at $10BN+?: Based on 278,000 MT X $37,000 per MT. Seems astronomical to me.
That is price for Hydroxide per kg.
Today lithium has gone from $9 (01/02/21) to $24 (18/10/31). Per kilo. Can one of you mathematicians calculate (correctly) current value?
Particularly , cade if fwe can mention Tesla , the race will be on in the States .
Yep Oz dollars cade , it would not surprise if we went higher in the surge when it happens , the Americans wont be able to get enough shares .
10 Australian dollars I assume that would be £5.38:-) that would make me very happy indeed.
ob , the whisper is Cannacord are entertaining influencial investors today in WA ( Western Australia ) A small litmus test wil be done if successfull we may see some buying but have no idea of their urgency to get in , it was , however , recognised as under valued by the said investors .