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 $5.
How does this compare to other peers Market Cap?
|
Column 1 |
Column 2 |
Column 3 |
| 1 |
Stock |
Current Market Cap (AUD$mill), time of posting |
Multiples of A40 at AUD$221mil |
| 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.
