Quick Peer Comparison Going into 2019, page-2

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Heeman

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19/12/18

18:37

Post #: 36910525
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Originally posted by El Jefe ↑

A40 EV approx $370m @ 26c
PLS EV approx $1350m @68c
AJM EV approx $470m @16c

A40 expected to produce ~ 300ktpa
PLS expected to produce 330ktpa
AJM expected to produce 220ktpa

A40 expected to produce at $400-600 pt - should get Better guidance in Jan
PLS expected to produce at ~$416 pt
AJM expected to produce at ~$428 pt

A40 debt approx $30m including 15% prepay shipments
PLS debt approx $140m
AJM debt approx $185m including Ganfeng prepay

EVs and debt to best of my knowledge.
Please tell me if wrong, I think accurate.
All companies should be at full run rate by mid next year.

If these figures come to pass, A40 towards lower end of costs guidance and belief that increasing resource is a matter of when not IF then it’s the most compelling buy based on the above metrics at these levels imo. Not to mention Relatively low capex to double production should resources come good and demand/pricing remain robust.

Worth considering that Ganfeng May provide the most security as a partner but at the sacrificing of price received. Tricky one. AJM somewhere at $700-800, PLS could be similar.

PLS for now will continue to demand a premium due to size, solid offtake partners, downstream potential and better marketing.

Offtake risk needs to be considered (would like some diversity here as would the market), product quality, along with management performance to date. PLS easily has the best partners. AJM partners JRO in a world of hurt and Lionergy have been selling down AJM shares recent years too, along with never ending missed targets and huge debt it’s not a pretty picture. I was considering buying a bit of PLS at these levels but if you believe the developing story here which has been mainly ignored by the market apart from a few players, then it’s hard to look past A40. Higher risk compared to PLS but higher reward if it comes to fruition imo.

One way or the other all questions should be answered in 2019 by all theee players. YMMV

Expand

IMO customer diversity is coming for A40, as Burwill prob won’t be able to match any new offerings.

Will be just a question of what sort of deal can we negotiate for the 100ktpa or so from the fines/middlings production.

A40 Price at posting: 26.0¢ Sentiment: Buy Disclosure: Held
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Quick Peer Comparison Going into 2019, page-2

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