Nic Jare

Not to sound like a broken record, but lithium keeps ripping higher. Chinese mainland lithium shares surged today, helped by EV subsidy hopes, upstream production halts, and policy signals aimed at curbing cut-throat competition 🇨🇳⚡

🔋🔋LITHIUM BULL 🐂 Well on a down day I decided to add European Metal Holdings $EMH - Looks like it has a much better chance in this cycle. EMH holds a 49% stake through its subsidiary Geomet s.r.o., with Czech utility CEZ a.s. owning the remaining 51%. The project targets battery-grade lithium hydroxide (LiOH) production, aligning with EU critical minerals goals under the Critical Raw Materials Act. The Definitive Feasibility Study (DFS) is due in December 2025, marking a key catalyst. Until then, economics are based on the 2022 Pre-Feasibility Study (PFS) update, which remains the most detailed public benchmark. Lithium market dynamics have improved since (prices up ~23% month-over-month as of Nov 20, 2025), but I'll flag sensitivities. - Current Valuation Metrics: As of Nov 19, 2025, EMH trades at A$0.21/share on ASX (market cap: A$46.2M) and 11p/share on AIM (market cap: ~£24.9M / A$50M equivalent). Shares outstanding: ~226.6M. Price-to-Book ratio: 1.5x (vs. Australian metals/mining industry avg. 2.3x), suggesting relative cheapness. - Analyst Targets: Consensus is "Hold" with an A$0.50 target (~138% upside from current). Longer-term forecasts (e.g., 2025 avg. price A$0.21, high A$0.39) imply modest near-term growth but explosive potential post-DFS. - NPV-Implied Value: The PFS attributes a post-tax NPV₈ of US$1.94B to the full project (36.3% IRR). EMH's 49% share: ~US$950M (A$1.43B at current FX). At current market cap (A$46M), this implies a ~31x multiple to attributable NPV – a classic "junior miner discount" for pre-production assets. Even applying a conservative 50% "risk haircut" (as in Liberum's 2024 note) yields ~A$715M fair value, or A$3.15/share (15x current price). Risks include lithium price volatility (current spot: ~US$10,200/t LiOH CIF, vs. PFS assumption of US$17,000/t – a ~40% haircut that could reduce NPV to ~US$1.1B). However, Cinovec's low-cost profile and EU strategic status provide a floor. With DFS imminent and funding secured, this is a high-conviction "buy" for lithium bulls targeting European supply chain localization.

Haven’t really seen anyone’s take on CATL’s prospectus recently released (they are listing in Hong Kong), so thought I might give my quick thoughts on it! A lot can be gleamed from CATL’s prospectus. Firstly, acknowledgement by the company that the profit margins have increased partly thanks to a reduction in LCE price. Secondly, CATL’s growth estimates are enormous. The ESS estimates in particular are well above most analyst’s expectations. They have it at 300 GWh for 2024, 481GWh for 2025 & 1400 GWh for 2030… Let’s convert these numbers GWh to LCE tonnes to make it easier to understand and compare to demand tables. 1kWh = 0.75~0.8kg of LCE. 0.9kg of LCE per 1kWh used to be the number that analysts adopted, but batteries have become more efficient with time. I've adopted 0.75kg off my latest data, but if anyone has a better number, please let me know. 1GWh = 1,000,000 kWh. 2025 – (481GWh * 1,000,000) *0.75kg = 360kt of LCE. 2030 - (1400GWh * 1,000,000) * 0.75kg = 1.05Mt of LCE. Compare this to the ESS numbers presented by UBS in 2024 for example (below screenshot). They had for 213kt of LCE 2025 and for 517kt of LCE 2030. So CATL’s numbers are almost double. That’s a difference of 12~13 x the yearly output from a mine such as Kathleen Valley to put it into perspective. This is just ESS. Another section of the prospectus that jumped out are the emerging applications. 390 GWh for this section by 2030. 390GWh x 0.75 = 292.5kt of LCE. ~3.5x greater than the 80 kt LCE UBS had listed for their "other Li-Ion demand" section. I’m not even going to bother doing the conversions on the 13 Twh by 2050 as it paints its own picture. I think the above suggests the growth of lithium is exponential. I couldn’t tell you a commodity that has grown at this rate (and is expected to grow). Can’t deny CATL is a fantastic company that is leading the way in battery tech. They do want to suppress the lithium price however and that makes sense as they are the world’s largest consumer of the stuff. I just don't see how it doesn't cause more harm than good and will lead to an explosion in lithium price (more detail on this on my other posts). Thanks for reading.