- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Diving deeper on Standard Lithium?
Posted on 10/17/21 at 8:30 am to GrizzlyAlloy
Posted on 10/17/21 at 8:30 am to GrizzlyAlloy
So can we get a recap from one of you who might understand the big picture, or at least your educated guess?
Before the PEA that was released on Tuesday, what was the value of SLI based upon?
Has there been a PEA of the Lanxess project?
I know it's been discussed, but just for continuity, the hopeful timeline for the Lanxess project?
And how the Tetra project fits into the picture?
Before the PEA that was released on Tuesday, what was the value of SLI based upon?
Has there been a PEA of the Lanxess project?
I know it's been discussed, but just for continuity, the hopeful timeline for the Lanxess project?
And how the Tetra project fits into the picture?
3
Posted on 10/17/21 at 10:54 am to Grassy1
2019 Lanxess PEA showed an NPV of $1.3B on the assumed three Lanxess plants, but that was with lower lithium prices and did not include bromine depleted brine. Tetra PEA just showed $2.8B NPV, Lanxess is probably at least $3B NPV if they did another one today with newer assumptions. So on the low end an NPV of $6B when it’s trading at $1.5B today. That includes no value for CA assets, licensing to other companies, European brine sites, etc. which would all be icing on top. Timeline is probably first three Lanxess plants (2022-2023), then bromine depleted Lanxess leases (2024-), then Tetra (2025-).
Gone to the beach in Florida this week, y’all hold down the fort for me!
Gone to the beach in Florida this week, y’all hold down the fort for me!
Posted on 10/17/21 at 10:59 am to Grassy1
This is all IMO; plenty of different view points, but:
Most valuations of the company were largely grounded in the PEA of the Lanxess project. So, to answer your question:
Yes, there has. Very high level, the PEA estimates annual production of 20,900 ton/yr lithium carbonate. The sale price was estimated at ~$13,500/ton LiCO3 (that price has gone up significantly). That is revenue of about $280M/yr. However, because it is a JV, SLI would retain around 40% for revenue of $112M/yr. Throw in an industry multiplier of 10x (that's high for a mining company, but that's a different discussion) and that puts your bar napkin valuation at just over $1B, not considering other ventures (but also not considering risk). That's around $7/share. But again, carbonate prices have gone up a good bit since this PEA so really you're probably closer to $9ish.
Speculative at best, but I think most are guessing/hoping for the JV to be announced within the next 3 months. You can probably estimate around 9-12 months to build out the south plant (the first of 3 phases) to commercial production. So we could expect to see real revenue being reported by early '23.
Not Tetra. "Southwest Arkansas Lithium Project". Tetra not involved. This one is a lot more difficult to value because of all the unknowns. You could go 'best case scenario' and say that their projected average annual revenue of $570M at full buildout, added onto Lanxess, gives you a target of around $700M/yr rev or ~$7B valuation by 2026ish. That's $45/share. Let's do it!
But, realistically you have to hedge even the best case scenario. To fund that project themselves, and get it started quickly, they'd have to do some cash raises which would dilute the stock. Assuming they grab the full $250M shelf offering, that's another 25M shares issued at today's pricing. So hack another $5-10 off that price. It could also be done via JV again, so that would cut away some revenue potential. Then you've got consider risk and what not.
Plenty of other factors to look at if carving out a really good valuation, but this is pretty much the highest level breakdown that's easy to look at based on what we know.
quote:
Before the PEA that was released on Tuesday, what was the value of SLI based upon?
Most valuations of the company were largely grounded in the PEA of the Lanxess project. So, to answer your question:
quote:
Has there been a PEA of the Lanxess project?
Yes, there has. Very high level, the PEA estimates annual production of 20,900 ton/yr lithium carbonate. The sale price was estimated at ~$13,500/ton LiCO3 (that price has gone up significantly). That is revenue of about $280M/yr. However, because it is a JV, SLI would retain around 40% for revenue of $112M/yr. Throw in an industry multiplier of 10x (that's high for a mining company, but that's a different discussion) and that puts your bar napkin valuation at just over $1B, not considering other ventures (but also not considering risk). That's around $7/share. But again, carbonate prices have gone up a good bit since this PEA so really you're probably closer to $9ish.
quote:
the hopeful timeline for the Lanxess project?
Speculative at best, but I think most are guessing/hoping for the JV to be announced within the next 3 months. You can probably estimate around 9-12 months to build out the south plant (the first of 3 phases) to commercial production. So we could expect to see real revenue being reported by early '23.
quote:
And how the Tetra project fits into the picture?
Not Tetra. "Southwest Arkansas Lithium Project". Tetra not involved. This one is a lot more difficult to value because of all the unknowns. You could go 'best case scenario' and say that their projected average annual revenue of $570M at full buildout, added onto Lanxess, gives you a target of around $700M/yr rev or ~$7B valuation by 2026ish. That's $45/share. Let's do it!
But, realistically you have to hedge even the best case scenario. To fund that project themselves, and get it started quickly, they'd have to do some cash raises which would dilute the stock. Assuming they grab the full $250M shelf offering, that's another 25M shares issued at today's pricing. So hack another $5-10 off that price. It could also be done via JV again, so that would cut away some revenue potential. Then you've got consider risk and what not.
Plenty of other factors to look at if carving out a really good valuation, but this is pretty much the highest level breakdown that's easy to look at based on what we know.
Posted on 10/17/21 at 11:26 am to Fe_Mike
quote:
But, realistically you have to hedge even the best case scenario. To fund that project themselves, and get it started quickly,
They could also issue bonds on the project since they have a very healthy balance sheet and no debt as it is right now.
Posted on 10/17/21 at 11:27 am to Fe_Mike
No possibility of using debt to fund?
Posted on 10/17/21 at 11:30 am to GeneralLee
quote:
019 Lanxess PEA showed an NPV of $1.3B on the assumed three Lanxess plants, but that was with lower lithium prices and did not include bromine depleted brine. Tetra PEA just showed $2.8B NPV, Lanxess is probably at least $3B NPV if they did another one today with newer assumptions. So on the low end an NPV of $6B when it’s trading at $1.5B today. That includes no value for CA assets, licensing to other companies, European brine sites, etc. which would all be icing on top. Timeline is probably first three Lanxess plants (2022-2023), then bromine depleted Lanxess leases (2024-), then Tetra (2025-).
That was also for 20 tons/year production, they have since said they can up to 70-100k tons/year. It was also at a higher cost of extraction than projected in Tetra PEA. Should be about the same or lower for Lanxess. Would say lower, but extracting post bromine extraction slows their process. They can use higher flow rates on the Tetra project. Not sure how much that will affect it. Not to mention there are at least two depleted brine sites on Lanxess's property that have been getting cleaned up. Those would be purely for lithium. They would have a higher CAPEX than Lanxess project. I would guess close to what Tetra site projects. But one of them is right by south Plant where SiFT and LiSTR units are. The other abuts the Tetra site. Pipelines already in place. So, could be a lower CAPEX. And could even be higher concentrations as they have been used and depleted of bromine. They are probably other old sites as well since they've been extracting for about 70 years. Well, I know they are but don't know where they are or anything else.
Posted on 10/17/21 at 11:35 am to SmackoverHawg
Idk the one dude said 394 per share so I’m gonna hold til then
Y’all better not paper hand
Y’all better not paper hand
Posted on 10/17/21 at 11:38 am to Fe_Mike
quote:
Not Tetra. "Southwest Arkansas Lithium Project". Tetra not involved
This one I haven't pinned down. There was rumor they had acquired some rights closer to Texarkana. It could also be the old Newell plant that Great Lakes Chemical (now Lanxess) used to run but has been dormant for quite some time as it was depleted of bromine. It's adjacent to Tetra site. Railroad runs through it to Tetra. Recent work on rail line there. No longer crosses the road. No hold ups for traffic . That was done a year or so ago. It would probably cover about 30k acres. Could be that SLI optioned that from the beginning from Lanxess or even Chemtura before the change. It may have still been under Great Lakes Chemical. Still a mystery on the SW Ark project but that's all I got. May be something else entirely.
Point is, there are a lot of additional sites other than those we have discussed.
Posted on 10/17/21 at 12:04 pm to BallsEleven
quote:
No possibility of using debt to fund?
To partially fund, it's on the table.
But at a capex of almost $1B and no real revenue on their books, it would be hard for them to secure that kind of loan.
They've got the $250M shelf offering and I've got to think they will use the entirety of it. I think it will go towards securing a higher share of the Lanxess production, and starting up the SALP build.
Posted on 10/17/21 at 12:58 pm to Grassy1
Posted on 10/17/21 at 1:00 pm to el Gaucho
quote:
Y’all better not paper hand
Bitch! This is my SLI hand.
Posted on 10/17/21 at 2:31 pm to Fe_Mike
Great summary, but I think the $9/share updated guess for Lanxess is way too low, like Smack said estimates now are probably more than 70K tons/year compared to 20K tons assumed in that PEA.
Posted on 10/17/21 at 3:03 pm to GeneralLee
So do you still have a target of $20-30 or has that changed? Seems like you are thinking it’s on the low end of the upside potential now.
Also, any ideas when they make an offering?
Also, any ideas when they make an offering?
Posted on 10/17/21 at 3:36 pm to go ta hell ole miss
With Lanxess's mention of increased output. I believe, just like with everything else, they'll exceed the 30k tons at Tetra. Even if they don't, I think $30-40 at low end.
I really think higher, but I'll go with that as to not make too many assumptions. Once JV announced, I think it's smoother sailing to that point. And that's with a P/E of like 9. But with the lithium speculation and other things that will come out about their tech, eventually investors will see them as a tech company and hopefully will trade accordingly with sky high P/E.
I really think higher, but I'll go with that as to not make too many assumptions. Once JV announced, I think it's smoother sailing to that point. And that's with a P/E of like 9. But with the lithium speculation and other things that will come out about their tech, eventually investors will see them as a tech company and hopefully will trade accordingly with sky high P/E.
Posted on 10/17/21 at 3:49 pm to SmackoverHawg
quote:
With Lanxess's mention of increased output. I believe, just like with everything else, they'll exceed the 30k tons at Tetra. Even if they don't, I think $30-40 at low end.
What is your target date for this?
Posted on 10/17/21 at 4:43 pm to molsusports
What are earnings estimates? Will they probably miss or be unimpressive at this point? And does it really matter since the hype is based on JV, PEA and future potential?
Posted on 10/17/21 at 5:14 pm to go ta hell ole miss
Yeah I’d say after the Tetra PEA that my target got adjusted upwards. I think that they might start to use the offering in the first half of 2022, or sooner if they use it to go to 40% on the JV.
Posted on 10/17/21 at 6:32 pm to GeneralLee
Smack, Genlee, FeMike.
You guys are Great
Thanks
Oops I forgot El Groucho lol
You guys are Great
Thanks
Oops I forgot El Groucho lol
This post was edited on 10/17/21 at 6:34 pm
Posted on 10/17/21 at 8:41 pm to LChama
That’s one thing I love right now, earnings reports are meaningless on this stock. Too many other stocks, earnings are just an excuse for sell offs regardless of beats or misses vs expectations.
Posted on 10/17/21 at 9:23 pm to LChama
quote:
What are earnings estimates?
Idk. I haven’t seen any estimates but this misses the point.
If SLI has any earnings at all it means that Lanxess has been buying lithium from The pilot plant.
Earnings from the sale of lithium would be confirmation that the technology works and is already actively producing lithium. This would further reduce the risk in my mind and should boost the share price considerably.
Page 444 of 946
Popular
Back to top
Follow TigerDroppings for LSU Football News