Member Info for Malik-

Oh look at what I just found.
Article in German. Google translate it.
My thesis looks like it has legs; the companies are already talking about it...

https://www.wiwo.de/my/politik/europa/lithium-bergbau-wie-deutschland-und-tschechien-von-teslas-lithium-hunger-profitieren-wollen/26775132.html?ticket=ST-3777121-acAeojHbhho4bZXpU6ld-ap1

that’s not what the article just out says. READ IT.

Oh look at what I just found.
Article in German. Google translate it.
My thesis looks like it has legs; the companies are already talking about it!

https://www.wiwo.de/my/politik/europa/lithium-bergbau-wie-deutschland-und-tschechien-von-teslas-lithium-hunger-profitieren-wollen/26775132.html?ticket=ST-3777121-acAeojHbhho4bZXpU6ld-ap1

I don’t think I will have to. It’s heading that way already. I am just sharing with you my research - so courtesy.
HAVE A READ through this German article below. Translate it.
;)
https://www.wiwo.de/my/politik/europa/lithium-bergbau-wie-deutschland-und-tschechien-von-teslas-lithium-hunger-profitieren-wollen/26775132.html?ticket=ST-3777121-acAeojHbhho4bZXpU6ld-ap1

The logical grade here is to OWN both stocks. EMH and Zinnwald.
If EMH performs (which I think it will continue to given we are heading into a hydroxide shortage later this year and likely offtake) ZNWD resource multiple will expand too; given its location and the arguments I put forward yesterday.
If a takeover of Zinnwald happens, you get the full leverage on being long that stock.

BCN owns 44% of what is now called and listed as Zinnwald.
Zinnwald owns 50% of its lithium resource in Germany.
Zinnwald intends to buy the remaining 50% to bring its shareholding in the asset to 100%.

The point is:
1) The dynamics of the lithium market has totally changed since. We are moving to hydroxide deficit this year; and just look at the share of lithium plays since Nov.
2) Do you think Germany wants Czech r to be THE supplier of lithium to its own battery plants in Germany if Germany actually has a lithium resource? They obviously want Zinnwald’s asset to see the light of day.
3) Economies of scale and savings on infrastructure by combining both assets means improving project economics

Because at the point valuations were terribly low.
Look at re-rating we have seen since November on the space.
With hydroxide moving to deficit later this year, the thesis has changed materially, since and will only get better from here.

And furthermore, Germany NOT having a lithium resource would in my view be VERY keen on this to move ahead.
From the EMH perspective it’s economies of scale - so it obviously makes sense. You just add the volume with limited additional Capex since it would be 1 project. It’s hugely accretive

The deposit Is shared on both sides of the border!
They are very similar.
I am not saying they are the same size.
I am saying if you applied the resource multiple ie-$/mtLCE implied in EMH share price to Zinnwald published resource size you would get, assuming they buyout their minorities which they aim to do, 6x the market cap you have today. (Or 3x the mcap if they don’t buy out the minorities, just as an idea).

Copper producer yet share p totally de-correlated with copper p makes no sense.
My 2022 valuation and forecasts at spot copper:

Revs: $69m
Cash costs: $37m. $80/t mined
Op cash margin: $32m
post tax: $27m

4x operating cash profit multiple = $108m
=> mcap: $98m=> 0.89/sh

I disagree.
European Metals holdings is pre financing, pre DFS, and doesn’t have an offtake yet (although msrket close to pricing one) - and look at its market cap and bear in mind it holds 49% of asset.
ZNWD plans to buy its remaining 50% share in the resource to get to 100%.
There is therefore no reason why the share p of ZNWD wouldn’t re-rate to mirror the $/mt produced LCE that EMH trades on.
The mechanical re-rate to Bac would be as I say 30%.

Of course they can.
This is my point. It’s a no brainer takeover for EMH.
And the market needs to wake up to that in its valuation of ZNWD.
We can’t be trading at 1/6th the value of EMH on a resource multiple basis for long.

Market has not done the work.
The ABB deal means they will EASILY get £15m of revenues per year from as a start.
This would justify a valuation of £700m valuation looking at EV/sales of peers. Then add to that optionality from Extreme E promotion and we should be heading for the billion mark.
Market here is highly inefficient

The market has totally missed the significance of yesterday’s news indeed; and once again.
Portuguese government holds a stake in Galp and will hold and indirect stake in Savannah via Galp when the 10% stake is taken. This is of HUGE significance in bringing the project forward.
Also, the offtake is for 50% of output whilst agreements are usually for 1/3.
Stock remains at a significant discount to peers that have an offtake or are close to getting one. Look at market cap of Piedmont. Look at market cap of European Metals (which only has 49% of project and hasn’t had offtake yet). Look at Bacanora market cap (which only has 50% of project).
With Spanish lithium resources having bid hurdles to get approvals; this becomes a KEY player in the Iberia!

I have bought in both stocks.
This is being totally overlooked by the market.

And a takeover by EMH would be MASSIVELY value accretive for them. ZNWD trading currently at 1/6th of EMH resource multiple.
WATCH the SPACE

I see clear rational and high likelihood for both EMH asset and Zinnwald to consolidate.

*Zinnwald Resource attached/effectively SAME as EMH. On German side of border
*Clear rational to consolidate both resources as ONE (M&A tgt)
*ZINWD seeks 100% of its pjct up
from 50%
*ZNWD trades at 1/6th of resource valuation of EMH currently - which is invisibly unsustainable. ZNWD is to my eyes a massively value accretive M&A target for EMH. WATCH THE SPACE

This is a PRIME M&A target by EMH.

*Bacanora has 44% stake in Zinnwald (ZNWD)
*ZNWD Resource attached/effectively SAME as EMH. On German side of border
*Clear rational to consolidate both resources as ONE (M&A tgt)
*ZNWD seeks 100% of its pjct up
from 50%, doubling upside
*ZNWD Resource multiple will have to CONVERGE to EMH’s => 6x UPSIDE
*At that multiple equity value upside to Bacanora from Zinnwald = £40-45m = +30%.