A near Lithium producer. Beneficiary of S&P/ASX 300 Index quarterly re balance? or something else..
Entered at the blue line.
Nice buy!
I've been in since 13c on the day the capital raising (at 13c) was announced early last year. Kept on buying around 10c and did a lot of trading along the way as it bounced around, often fairly predictably. I was watching before they raised the funds, but knew that was going to crash the price. I'm guessing you'll make more than 50% on your money before the end of the year, and if you hang on for 2+ years I'm confident you'll have a handsome multibagger.
This was absurd value below 10c not much more than a year ago, and it's just taking time to catch up. Stocks struggle to increase too quickly due to profit takers, and plenty of people trade it (I was very guilty of this for around 18 months) which keeps the hand break on the gains.
Just crunching some back of the envelope numbers, AGY plans to expand to 12,000TPA over the next 2-3 years (with 90% ownership of the project). You can plug in whatever number you like for lithium prices, but at current spot prices, net revenue would be above the current market cap! Even if you want to say they'll be selling for half that (I personally expect they'll be higher, but let's go with conservative forecasts), net revenue is almost as high as the current market cap, so using whatever value of P/E you choose, this will be a multibagger.
But, it gets better. The plan is to expand to 25,000TPA over the following 2-3 years, so you can take your multibagger and double it in around 4-6 years.
There's also the chance that their Tonopah tenement will have a commercially viable resource, in which case you have an entire extra project for the company which could potentially be comparable or even larger to the Rincon project (completely unproven at this stage and is appropriately being priced in as about zero, but we have that wildcard).
If lithium prices do what I expect, in about 5-6 years they should be paying dividends of around my average buy price (about a third of yours). If not, hey, at least a smaller multibagger is still a multibagger.
With all this in mind, it's no wonder we're seeing a rally (which is really just a continuation of the long term up trend which has been going on for more than a year), but current reasons are that we're just about to start our first commercial scale production (though due to increased lithium prices our pilot plant has more or less been commercial production for a while now), we should get out 10,000TPA expansion permit any time, our drill results hopefully including a resource expansion are due any time and won't be far off, yes, the ASX300 inclusion this week no doubt helped, and lithium prices have just blown the 500,000CNY cap, so the whole sector is rallying.