Global Lithium Resources Ltd (ASX: GL1) has caught the eye of the analyst team at Shaw and Partners, who like the look of its Manna Lithium Project.
Shaw has initiated coverage on the company with a buy recommendation and a very bullish price target, which we'll get to shortly.
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World-class asset
Firstly, let's have a look at the project which Global Lithium Resources is proving up.
The company in December released a definitive feasibility study (DFS) on the Manna project, which is 110km east of Kalgoorlie in Western Australia.
The company said the DFS "confirms Manna as a long-life and economically robust lithium asset''.
The DFS said it would cost $439.1 million to build the project, which would have a payback period of 3.5 years and a mine life of 14.3 years.
The life of mine cash flow was estimated at $1.15 billion, while the mineral resource estimate came in at 51.6 million tonnes at a grade of 1% lithium oxide.
Global Lithium Managing Director Dr Dianmin Chen said at the time that the study indicated a robust project.
He added:
This DFS underscores the potential for Manna to both create shareholder value and contribute to the world's lithium supply chain through its robust economics, significant long-life potential and Company's commitment to invest in and develop projects in Western Australia. The DFS confirms Manna's place as the third largest lithium deposit in the Eastern Goldfields, poised to be a significant contributor of lithium to support countries around the world as they continue to pursue energy transition and decarbonisation goals. Our disciplined approach to de-risking the future development of Manna, evidenced by the grant of a Mining Lease and signing of a Native Title Mining Agreement, along with the project's compelling financial and technical metrics, sets a strong foundation for future funding and development options.
Dr Chen said the company was targeting a final investment decision in 2026, with discussions continuing in areas such as signing up offtake partners.
Lithium shares looking cheap
Shaw's report on the company said the Manna project was of "world class scale and quality''.
They added:
The project is designed for high efficiency, utilising ore sorting to optimize mill feed and reduce waste. This results in an extremely competitive all in sustaining cost of $1,101/t on our numbers, positioning Manna in the lowest quartile of the global lithium cost curve. This low-cost profile ensures the project remains resilient and commercially viable even during periods of lithium price volatility.
Shaw said the project was rapidly approaching "shovel ready status".
Shaw has a price target of $1.50 on Global Lithium shares, compared with the current price of 50 cents.
Global Lithium was valued at $124.9 million at the close of trade on Tuesday.
