While I appreciate the references to SBM, and the constant mention of $5.00 per share (would be amazing!)
Lets compare Market Cap to Market Cap. SBM: $2,631M at $5.00 per share A40: $221M at $0.165 per share numbers are approximate.
This puts SBM's Market Cap at 11.9 times that of A40.
If A40 were to match the Market Capital of SBM it would be a price of about $1.96 (11.9 * 0.165).
$1.96 would be great! But it isn't $5.
How does this compare to other peers Market Cap?
1
Stock
Current Market Cap (AUD$mill), time of posting
Multiples of A40 at AUD1mil
2
MIN
$2,913
13.2
3
PLS
$1,168
5.3
4
GXY
$802
3.6
5
ORE
$842
3.8
6
KDR
$524
2.4
7
AJM
$263
1.2
8
AVZ
$92
0.4
9
BGS
$42
0.2
10
4CE
$4
0.0
Looking at PLS, KDR, GXY etc it seems that todays Lithium market I suggest we should be at about the $800M to $1B Market Cap, once the startup concerns have been cleared. This is lower than the $2.6B of SBM. $1B Market Cap gives A40 a price of about AUD$0.74
However, the whole Lithium sector is down at the moment, possibly to about half of where it was in January 2018. This means that maybe a future Market Cap of $2B could be possible, maybe even $4B could happen when the Lithium market starts to pick up speed.
So, today, I don't believe $5 is possible, but when the Fines circuit is up and running, and we've got DMS2 running, and a 20 year mine life, with average sales above USD$750 per tonne, and the Lithium market starting to grow to the Demand story that we keep hearing, then maybe $4 could be possible for A40. $5 would still be a stretch without some serious growth and expansion from the company (this could happen).
I'll still be holding from now for at least a couple of years, hopefully for a few years of dividends, hopefully I get to see A40 around the $2 to $4 price.
All IMO, DYOR, etc.
A40 Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held