EMH 7.69% 28.0¢ european metals holdings limited

A slightly disappointing PFS sent the stock price crashing in...

  1. 7,550 Posts.
    lightbulb Created with Sketch. 948
    A slightly disappointing PFS sent the stock price crashing in April, presenting a good opportunity for new buyers.

    https://seekingalpha.com/article/40...ive-low-cost-lithium-spodumene-project-europe
    From LSE
    European Metals is sitting on a massive lithium spodumene and tin-tungsten resource, the largest in Europe, and in the top 5 globally. Whilst the lithium grade is low, that is offset by excellent by-products, allowing the cost of production (net of by-product credits) forecast to be the lowest of any spodumene projects globally.
    The current PFS result of a post-tax NPV8% of US$540m is average, and not yet that impressive, especially considering the high Capex of US$393m. This is mostly as it was based on a mere 9.9% of the resource. However, my view is that the resource will grow substantially (~50%) during the next year, and the company will increase the forecast lithium production for the FS or DFS, resulting in a significantly larger NPV. This was done by Pilbara Minerals with their stage 1 (NPV 10% of AU$709m) and stage 2 DFS (NPV10 of AU$1,165m).
    Valuation is attractive right now due to the disappointing PFS reaction, and because they are still at a relatively early stage. Given the low cost of production, huge lithium resource, the company should be able to progress with the next stages (FS or DFS, permits, equity off-take partner). With each success, the stock price should steadily rise.
    My current price target is AUD 2.86 for end 2019 (3.7 x gain), with upside if they expand their lithium production volumes as I expect. I rate them a strong speculative buy.
    As usual, all comments are welcome.
 
watchlist Created with Sketch. Add EMH (ASX) to my watchlist
(20min delay)
Last
28.0¢
Change
0.020(7.69%)
Mkt cap ! $34.82M
Open High Low Value Volume
26.5¢ 28.0¢ 26.5¢ $2.747K 10.34K

Buyers (Bids)

No. Vol. Price($)
1 30000 26.5¢
 

Sellers (Offers)

Price($) Vol. No.
28.0¢ 10000 2
View Market Depth
Last trade - 13.52pm 29/03/2024 (20 minute delay) ?
EMH (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.