Member Info for Malik-

I am showing EV/NPV metrics which naturally corrects for resource size.

In any case, regarding your specific comment - that’s not particularly relevant in any case.
The reason being: The very bulk of value assigned to a lithium stock is from the mine plan not the total resource. This is because the unused resource is valued at very low multiple since no capex has been assigned to its extraction. This is very well seen in the valuation of Savannah. Savannah has a group resource of 0.38Mt LCE ( yes v small) - they own 100%. Their planned usage of that resource is 75% - or their PFS assumes they will produce 0.29mt over life of mine vs 0.38Mt of group resource.
Market cap of Savannah? £59m
Do the same analysis for EMH. 7.7Mt resource, of which we own 49%, so 3.8Mt effective share. Our market cap £139m. Your way of thinking would suggest EMH should trade at 10x the market cap of Savannah (3.8/0.38). That’s obviously not the case; it trades 2.4x the mcap of Sav only.
Now back to EMH. The reason for this is the EMH/Geomet PFS is based on annual production of 25ktpa over 21y (yes I know talks of doubling it - but then that doesn’t come for free - need to adjust capex up). 25ktpa*21 = 0.53Mt of Cinovec resource assumed to be utilised in mine plan out of 7.7Mt. That’s very little but again, think of the capex requirements to use the whole resource…. This dilemma is very seen with Vulcan by the way which has an enourmous 15Mt resource. But then as a company l, will probably never be able to consume it,
Now let’s do Zinnwald. Zinnwald flagship resource is 0.76Mt, now 100% owned. Their FS mine plan is based on 0.22mt of that, so 29% of resource os assumed to be utilised over life of mine.
Now, Zinnwald group just added a week ago a massive exploration license nearby which raises group Li by 35%. So ZNWD now has 1.04Mt of groupwide LCE resource at 100%.
1.04Mt @100% vs EMH 3.8Mt (7.7mt @49%). Just adding this for reference, to also correct misconceptions about the 10x resource I keep reading, Under your way of seeing things, the resource of Zinnwald (utilised +unutilised) is not 10x smaller - but actually 3.6x smaller (3.8/1.04). Again, as just described this means very little when thinking of valuation - since it’s utilised resource economics that matters.

This simply can’t be trading at such bombed out valuations.
You can’t be trading at such huge discount to your next door neighbour. This calls for merger arbitrage and so, makes the M&A case salivating.
If you the acquirer buy something which trades at 3-5x cheaper than you - it’s immediately value accretive your your share price.
I have said before, a takeover by EMH would be +70% on EMH share price before accounting for big synergies.
HAS TO RERATE ACCORDINGLY

They won’t sit and just be a minority holder in Zinnwald.
It makes no sense. They either sell out, buyout, or plan something grander with EMH in which they then take a politically acceptable stake in a combined EMH/ZNWD entity.
In any case, ZNWD is primed to be takeover candidate.

I did a chart this morning, comparing the valuations of key lithium stocks (see link below).
I posted this for Zinnwald, but useful for all key names on space. This assumes close to spot hydroxide p.
For BCN, this is priced at share p as is today; not at higher takeout valuation. At takeout p, for BCN, you’d need to add something like 8-9pp to the shown ratio.

https://twitter.com/malik49977264/status/1408326105879257089?s=21

Yes. It’s mechanical - since acquisition of 50% of Deutsche Lithium is predominantly share-based.
(Look at boxes ticked in press releases)

I did a chart this morning, comparing the valuations of key lithium stocks (see link below).
I posted this for Zinnwald, but useful for all key names on space. This assumes close to spot hydroxide p.
For BCN, this is priced at share p as is today; not at higher takeout valuation. At takeout p, for BCN, you’d would need to add something like 8-9pp to the shown ratio.

https://twitter.com/malik49977264/status/1408326105879257089?s=21

(PS: for Bacanora, this is priced at share p as is today; not at 65p takeout valuation. At takeout p, for BCN, you’d would need to add something like 8-9pp to the shown ratio).

I did a chart this morning, comparing the valuations of key lithium stocks (see link below).
I posted this for Zinnwald, but useful for all key names on space.
EMH scores well.
Expect a doubling of the valuation of EMH on offtake, to match valuations of BCN and Piedmont. This assumes close to spot hydroxide p.

https://twitter.com/malik49977264/status/1408326105879257089?s=21

I owned Vulcan. Fantastic team.
I sold out. My concern there was twofold:
1) a simply enormous capex requirement. And sting need of know how. You rely on a utility to get involved. Possible - but makes EMH way more likely to come first (and we’ll before).
2) You rely on on German govt not cutting subsidies for geothermal - we’re this to change it would kill the proposal
3) France which borders Vulcan resource has turned cautious on geothermal as it causes earthquakes.

I did a chart this morning, comparing the valuations of key lithium stocks (see link below). Zinnwald’s valuation are unsustainably low. Closing valuation gap with EMH; suggest fair value of 45-90p (!).

https://twitter.com/malik49977264/status/1408326105879257089?s=21

(In Scenario of Succesful Bac takeover by Ganfeng of course)

As I have said before, I believe Ganfeng will sell their stake to EMH.
There would be big synergies of consolidating EMH and ZNWD resources into one.
I am a shareholder of both EMH and ZNWD and the prospect of a
merger is something i am salivating about - for both names.

This is going to be a fantastic six months for the shares.
The company confirmed yesterday that there are plenty of product catalysts in H2 - something the market feared was lagging and dragging ; while Extreme E continues til October. ExtremeE is the single biggest source of promotion for the company this year.
Extreme E contributed £150k of revenues for the first race, and so, assuming a similar revenue contribution for each of the other ones and all else equal - the company should be booking revs of £0.8m from Extreme E alone this year. I remind people that in May last year (well before excitement grew further strongly on hydrogen/and govt policies) ITM had a £700m mcap for £3m of sales => this contribution from ExtremeE alone is therefore very significant from a valuation perspective for us - particularly since we are at the very start of revenue generation.
The company yesterday wrote “ have a development book of more than 50 discrete, qualified deployment enquiries, many with multi-system order potential” - This bodes very well for what’s to come.

From a macro perspective, we continue to see interest rates as suppressed - and yet the shares are struggling to recover from when interest rates were a lot higher a few months back on inflation fears - meaning any risk of interest rates rising in the future in what I see as an unlikely event of a taper tantrum at some point down the road is already priced for the shares and more.
This presents an excellent entry point.

We are significantly undervalued. I stick to my 3x valuation upside (£1.3bn mcap) from here: based on a blended average of us achieving a low case 0.15% market share of the $20bn diesel generator market in time and nothing else (=£700m valuation at 8% discount rate) at 90% probability ; and blue sky of 1.5% market share of diesel generator market only (=£7bn valuation at 8% discount rate) at 10% probability.

What I mean, is of course we are still in Extreme -
*relatioship

Of course not.
We supply the power that the battery chargers need to the power the cars.
It’s a symbiotic relax hip; which is why O said a few days ago, I am expecting an announcement of an agreement between Enel and AFC. Were this to happen; it would be massive for AFC.
As far as I am aware Enel doesn’t have a hydrogen specialist partner in Europe as yet.

This guy is totally misinformed, and embarrassingly so.
He should go and tell Cez, the Czech govt, RK Equity, the investors of EMH, and soon VW that the Cinovec is unrealistic and questioning it’s recoveries.
Moreover, he talks of what he thinks the Chinese like/don’t like. He doesn’t mention that Ganfeng want to buy into Bacanora which is mkre questionable clay resource.
Finally, he doesn’t square these projects’ importance for the EU to attain its 80% lithium self sufficiency.
Under that guys assumption - no resoruce in EU would see light of day - as he talks of spodumene. And as far as I am aware the only spodumene resoruce in EU is Savannah’s and that one reached some big hurdles recently; and it is small…

…on the project.
I repost what I just wrote below so sellers can see and why they should think twice before selling:

Worth reminding that CEZ only a few days ago talked of doing 1 processing plant for both EMH/ZNWD pjcts = clear belief in ZNWD pjct.

Also should be mentioned that Cinovec on Cz side is also zinnwaldite mica based; and EMH proved they can produce carbonate with big 92% recovery

And for those asking about micra:
EMH proved they could produce battery grade carbonate with solid 92% recovery)

I want to remind people that senior CEZ director only a few days ago talked of doing 1 processing plant for both projects. This was overlooked by the market but was very significant news for Zinnwald.

The Cinovec deposit on Czech side has the same geology, and is mirca based.
(Cez is the £12bn Czech utility which owns 51% of the Cinovec deposit; and Czech govt owns 70% in Cez) only

(FYI, SGN has assets of £6bn)