Mansoor’s Radar: The impressive growth of Global Lithium Resources

GL1 has seen impressive growth, starting from a $26 million IPO to now have a market cap sitting well over $400 million.

The success of Global Lithium Resources, now trending to $1 billion, is not just about a small-cap company listing during the battery metals boom of 2020. It’s also about the impact of Ron Mitchell, who brought his vast experience to the company. Initially, he made a difference at Marble Bar and then at Manna.

He worked hard to nurture the company, and as a result, GL1 now has a market cap close to half a billion. Through his efforts, shareholders and stakeholders have benefited, and GL1 has become one of the few lithium explorers with a JORC resource above 50mt. Mitchell’s contributions have put the company on the map and made it a success story. 

CAPITAL RAISINGS  

From its listing on May 21 to date, Global Lithium has utilised multiple avenues to keep cash coming into the coffers. Post IPO, Yibin Tianyi came onto the registry with $13M, followed by Mineral Resources, which allocated $30M. Finally, around 9 months ago, a massive capital raise of $121M came to acquire Manna outright and initiated an enormous drilling program for a JORC upgrade. 

With a current market cap of around $450M, the initial round of investors has done exceptionally well. The last round of CR completed at $2.25 is underwater!

EXPLORATION SPEND VS DRILLING PROGRAM 

Like all mining IPO companies, the initial focus is exploration and covering the meters. Global Lithium is no different, achieving >110,000 meters over 24 months for $24M. Its value for money to meters completed is unparalleled in the industry, with a dollar intensity of roughly $200/metre. 

Global Lithium has worked on a two-pronged strategy. MD Ron Mitchell and the Board focused on business development, raising funds, bringing in a cornerstone investor, portfolio additions while the ground crew worked on achieving metres. Initially, the field crew focused on Marble Bar and Manna with heavy-handed exploration. Marble Bar is back in the equation with a 35,000-metre drilling program planned for 2023. 

CURRENT RESOURCE ESTIMATE UPSIDE VS SHARE PRICE 

• Resource: Considering the last two years’ dollar per meter cost, Global Lithium has enough cash on book to achieve above 50,000 meters of drilling and potentially deliver 27 to 30% higher MRE and achieve ~80Mt of resources across both Marble Bar and Manna. 
• Share Price: The GL1 share price is not reflecting the amount of work that has gone into the ground, and analysis suggests there is ~70% upside to the share price from the current level. With market sentiment changing and regular announcements to the market, $2.10 is the short-term target, and $2.80 is a medium-term valuation, potentially eventuating pre-resource upgrade. 

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