In the chart above, updated for market close, New York time on 12/22/21, Cypress Development Corp. (TSX-V: CYP.v) / (OTCQB: CVDVF) is trading at 11.7% of its PFS-derived, after-tax NPV(8%), assuming a LCE price of US$11,875/tonne(vs. an average LCE price of US$12,163/tonne from the eight listed peer projects). By contrast, the above projects are valued at an average of 67.4% of their respective after-tax NPV(8%)s. Readers should note that the current spot price for Li carbonate in China is > US$38k/tonne.
Please read the footnotes at the bottom of chart. Note: Not all companies own 100% of their flagship projects, and some companies control more than one project. Peer project values are adjusted to reflect these factors.
CYP is trading at a 82.7% discount to the average of the eight peers. All else equal, if CYP’s share price were to triple to C$5.78, and peer valuations were to increase by an average of +50%, CYP would still be trading at a 65.3% discount (on an EV/after-tax NPV(8%) basis)….
Notice the ratio of after-tax NPV(8%) to upfront cap-ex for each project. This is a relative measure of a project’s capital intensity, the higher the better (more NPV bang for cap-ex buck). The peers have an average ratio of 1.9x NPV(8%)/cap-ex. Cypress has a ratio of 3.3x, higher than any other peer.
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