One of the worst performers on the market today has been the Birimian Ltd (ASX: BGS) share price.
At the time of writing the multi-commodity mineral exploration company's shares are down a whopping 35% to 27 cents.
Why have its shares plunged lower today?
This morning Birimian provided the market with an update on its pre-feasibility study (PFS) at its Goulamina lithium project which was completed to an overall estimate accuracy of +/- 25%.
According to the release, the PFS estimates capital costs in the range of US$86.9 million to US$142 million including contingency.
Further, the project has a net present value at a 10% discount rate of between US$85.6 million and US$126.4 million.
Though the inclusion of secondary processing could lift the project net present value to US$637.9 million for an estimated additional capital cost of US$221 million for concentrate-only scenarios.
What does this mean?
Whilst the project may still be viable, investors appear to believe that the result of the PFS means its overall profitability won't be as great as first expected and will ultimately be unable to justify its previous market cap.
And I would have to agree. As things stand I don't see a lot of value in the project or owning its shares unfortunately.
Instead, I would sooner consider an investment in one of its lithium peers such as Galaxy Resources Limited (ASX: GXY) or Orocobre Limited (ASX: ORE).
