The fall of lithium prices in China has stopped, and the prices have been stable since mid-august.
The share prices of most lithium miners have stopped dropping but started to rise slightly in the US, Australia, and China. It is time to enter lithium miner sector now.
The 2000 tones / year production project (Rinchon Project)
on the path to
achieving fully continuous production operations and leading to ramping up production
operations during H2-CY2023
The pricing of the products is as below:
The S&P Platts lithium carbonate price CIF
North Asia ended the June quarter at US$43,800/t, whilst the Benchmark Mineral Intelligence
lithium carbonate CIF Asia (contract) price was US$50,000/t.
So if we assume a mid-point price of USD 47,500 / t, the full production of 2000 T/ year will results in a sales revenue for next year (year 2024) about 2000 x 47500 = 95 m USD, that is about 95 x 1.52 AUD = AUD 144 m.
During the quarter, the company cash flow dropped by about AUD7 m, so we can anticipate the operational cost per year to be above AUD 28 m (4 x 7m). Assuming more cost for electricity and salaries etc, the operational cost when it is in full operation would be around AUD 40. So the gross profit would be like AUD 144 – 40 m = 104 m, after tax net profit would be around AUD 70 m.
Argosy has 77.5% interest in the Rincon project, so its share of the profit would be around 0.775 x 70 = AUD 54 m.
The number of shares is found at Yahoo site or on Page 42 of the annual report at
The fall of lithium prices in China has stopped, and the prices have been stable since mid-august.
The share prices of most lithium miners have stopped dropping but started to rise slightly in the US, Australia, and China. It is time to enter lithium miner sector now.
Argosy Minerals made a update on June 30, 2023:
https://www.argosyminerals.com.au/sites/default/files/financial_report_file/agy-quarterly-activities-report.pdf
The 2000 tones / year production project (Rinchon Project)
on the path to
achieving fully continuous production operations and leading to ramping up production
operations during H2-CY2023
The pricing of the products is as below:
The S&P Platts lithium carbonate price CIF
North Asia ended the June quarter at US$43,800/t, whilst the Benchmark Mineral Intelligence
lithium carbonate CIF Asia (contract) price was US$50,000/t.
So if we assume a mid-point price of USD 47,500 / t, the full production of 2000 T/ year will results in a sales revenue for next year (year 2024) about 2000 x 47500 = 95 m USD, that is about 95 x 1.52 AUD = AUD 144 m.
During the quarter, the company cash flow dropped by about AUD7 m, so we can anticipate the operational cost per year to be above AUD 28 m (4 x 7m). Assuming more cost for electricity and salaries etc, the operational cost when it is in full operation would be around AUD 40. So the gross profit would be like AUD 144 – 40 m = 104 m, after tax net profit would be around AUD 70 m.
Argosy has 77.5% interest in the Rincon project, so its share of the profit would be around 0.775 x 70 = AUD 54 m.
The number of shares is found at Yahoo site or on Page 42 of the annual report at
https://www.argosyminerals.com.au/sites/default/files/financial_report_file/20230327-agy-annual-report-shareholders.pdf
With about 1.4 billion shares outstanding, the EPS is around 54 /1400 = 0.0385 AUD.
This is significantly lower than the estimation of AUD 0.95 on the Yahoo Finance web, what went wrong ?
https://finance.yahoo.com/quote/AGY.AX/analysis?p=AGY.AX
If the planned 10000 T/Year production expansion is fully operational, the profit will surely jump !
With EPS ~ 0.0385, the current share price of AUD 0.32 makes a PE ratio of 8.3 in Year 2004, not too bad, but not very attractive either !
This is a very good company to buy at the current share prices.
What a big mistake ! One should have read the comments on Aug. 2, 2023.
Argosy Minerals to invest US$200mn in Argentina’s Salar Rincón phase III:
To expand capacity by X 6 folds in 2 years !
Read at
https://www.bnamericas.com/en/news/argosy-minerals-to-invest-us200mn-in-argentinas-salar-rincon-phase-iii