LI3 Energy Inc (fka LIEG)

[Dr_Vonschellan]

LPI published the latest_greatest_NewCo instruction_manual/bible this morning.
Everblu Capital AUS issued its research report on LPI (Lithium Power International) this morning. Click Here for report in PDF
LPI is our 50% partner in NewCo Maricunga JV. I have never seen such an objective comprehensive report on a mining company in all the years I have been investing in lithium/cobalt/graphite. Also, I have never seen 12 year-old EverBlu Capital before, but that aspect remains to be researched further. This report methodically puts the whole deal warts & all right out in the open for all to see. Such a forthright presentation of all the facts on NewCo Maricunga is now ideally concentrated in one resource and is quite handy to view I must say.

EverBlu is now projecting a AU$1.20pps target for LPI which would be a 233% increase over the current pps of AU$.36
That is quite a nice bump. EverBlu thinks the LPI total market cap will increase to AU$200M in the medium term with LPI's share in NewCo valued at a minimum of AU$105M (US$80M). In this future medium term scenario it could then be gleaned that LIEG would have a market cap of $28M with MSB at US$52M.

In my last shot (Click Here for spreadsheet results) at determining the NPV for LIEG I hypothesized that LPI might soon announce this salar would be revised to contain 1,000,000Tonnes of LCE instead of the 574,000Tonnes calculated in 2012. Based on LOM (Life of Mine) being 20 years, using $18,675/T as the gross selling price for LCE and a maximum 48,790tpa production I then offered a 2017 NPV for LIEG of $.127pps

From page 5 of 26 in this EverBlu Capital Research report it now appears that LPI is happily going to say the NewCo Maricunga JV has 1,300,000 Metric Tonnes of LCE and a revised stretched out 30 year LOM coupled to a self-imposed 50% yield (ie constriction) which translates into 20,000tpa production output. This conservative output constriction may be artificially set in place until the JV knows better the Chile political climate and the world demand. EverBlu Capital calculations are based on a low price of US$10,000 per Tonne price for LCE which is conservative. BenchMark Minerals (Click Here go to page 8) is saying today's price is $12,000/mt

For funnzies let's factor in EverBlu Capital's numbers and see where we LIEG shareholders stand today in the big picture.

Lithium Carbonate Equilvalent = 1,300,000 Tonnes
Price Li2CO3 = $12,000 /Tonne
30-year life span of mine = 30 Years
Life of mine value = $15,600,000,000

Tonnes production 100% capability per year = 43,333 Tonnes
Yield Restriction = 50%
Tonnes production capability per year = 21,667 Tonnes
Mine gross revenue per year = $260,000,000
Operating Expense per tonne $3,000 = ($65,000,000)
Maintenance per year = ($5,000,000)
Depreciate Capex of US$250M over 30 years = ($8,333,333)
Revenue after expenses ST = $181,666,667
National Royalty 3% = ($5,450,000)
Local royalties / community payment 22% = ($39,966,667)
EBITA = $136,250,000
Estimated Income 35% of EBITA 35% = $47,687,500

LPI income per year 50.0% = $23,843,750
Minera Salar Blanco income per year 32.3% = $15,403,063
LIEG income per year 17.7% = $8,440,688

Value of LIEG at Cap Rate 8% = $105,508,594

Number of LIEG shares = 500,121,178
Projected value of LIEG share March 2019 = $0.211 PPS

Interest Rate = 4.00%
Nper. Number of months in study = 24
Minimum appreciation per month per share 4.00% = $0.008 /mon/share
Future Value 2019 = $0.211 PPS
Type (payment at beginning) = 1
Value of LIEG share March 2017 = $0.052 PPS

We should be trading at the very least of $.052pps today based on EverBlu Capital's quite conservative view of our Maricunga asset... but yet here we are bobbing around at $.0242pps

The Doctor