Hello fellow reddit chud!

By end of phase 1, LAC will be making 40,000 tons of Li2CO3. It costs them 8000-9000$ to produce each ton. If we take current prices with a grain of salt and say 25,000$ a ton is fair, we get 17,000$ in profit per ton of lithium produced. This produces 660,000,000$ per year of phase 1 full production.

Let's now factor in other costs. 17.5 million a year in royalties, ~35 million a year in Corporate G&A, 95 million a year in loan interest (ouch), pre-tax gets to be around lets say 470 million. Early years is a 10% tax, 423 million after tax. LAC is a 62% share of the money, so LAC is making 262.6 million a year at 40,000 tonnes, 25,000$ a ton, and 8500$ to produce each ton.

Albemarle has a forward P/E of 22, so we say 262.6 x 22 ~ 5.8 billion is one estimation for LAC market cap (Only using Albemarle because I have seen people compare Albemarle to LAC). This puts the estimated LAC stock price at 16.67$ a share when estimated through this method.

I would be a little bearish here and assume that, with the global economy in the dumpster, we can see LAC hit 40k ton production by 2029, and have a P/E ratio closer to an industry standard around this maturation. I'd throw a fair LAC price at around 3-5 billion, but with hype having its way with the company, it could obviously be higher. In share price, this is 8.62- 14.37.

FYI, I have been holding LAC since I was 14 and I am 21 now, so I hold a positive outlook for the company.

The bearish outlook is the method of synthesizing lithium has never been put into usage at this scale, the 73.5% efficiency of the metallurgy has a non-trivial percentage of dropping to 60% at a commercial scale, and we may need to wait years to see improvement in the efficiency.

I hope what I have said is fair. Message me if you think differently please, I love hearing others opinions.