Forgot to add the Shorecan valuation (below), worth noting this is just for Lake Wells, they have a total of 9 lake beds to extract SOP from (remember SOP is more valuable than the much more common MOP). Given the scale of the resources it is easy to see why a buy out at 20X current m/cap is my target after the demonstration plant is up and running
"Valuation: significant upside potential
Our ‘base’-case post-tax FY2018 NPV10% valuation for Salt Lake Potash is £259m (114p/share FD). This valuation considers primary SOP production at Lake Wells only, based on the lake’s current resource estimate. It does not provide the potential for production of co-products/by-products, ‘secondary’ SOP production from Muriate of Potash (MOP) conversion, renewal of SOP resources as a result of brine recharge, or production from the other lakes in the GSLP. "
From the Shorecap research Note, 17th Nov 17
Lots of newsflow to come on this one for 2018.
Personally I am expecting we shall see the following:
Institutional Investor buy in (there are II’s holding here already) before funding of demonstration plant
Funding for Demonstration plant (not expecting dilution on this)
Contracts and construction of plant 2Q18
Offtake agreements, if not already announced as part of funding for demonstration plant
Updates on construction milestones.
There are a couple of broker notes worth reading. Based on the demo plant they have targets of 56pps to 63pps, which is a minimum of a bag. But that overlooks a pertinent point. Getting in at this price means more shares for the eventual exit which will be way higher than that one bag, getting in now willl double my profits at the eventual exit price over getting in once it has bagged as I will have double the number of shares.
This one is a no brainer, resource is there, easy extraction, world class management (done it before many times, including 100 baggers), guaranteed market, premium product, I could go one and on.
But given news will start soon, I am expecting some good things starting here….
Best time to get in is when it is well under the radar
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