In the chart above, updated for market close, New York time, on 8/13/21, Cypress Development Corp. (TSX-V: CYP.v) / (OTCQB: CVDVF) is trading at 9.8% of its PFS-derived, after-tax NPV(8%), assuming a LCE price of US$11,875/tonne (vs. an average LCE price of US$12,061/tonne from the eight listed peers). By contrast, the above peer projects are trading at an average of 51.0% of their respective after-tax NPV(8%)s.
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 80.7% discount to the average of the eight peers. If CYP’s share price were to quadruple to C$4.95, and peer valuations were to increase by an average of +50%, CYP would be trading at a 61.4% discount (on an EV/after-tax NPV(8%) basis)….
Not on the chart above, but I’m also tracking an additional five PEA-stage lithium juniors trading at an average project value to after-tax NPV(8%) ratio of 37.4%. So, Cypress is trading at a steep discount to those five earlier-stage projects as well.
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 eight peers have an average ratio of 2.1x NPV(8%)/cap-ex. Cypress has a 3.3x ratio, which is second only to Neo Lithium’s 3.6x ratio.
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