Our target price for Alba is BD1.25/share. Our NPV valuation is based on discounted cash flows using a WACC of 11.5%, operations life running through 2040, and long-term real aluminium price of $2,800/t and
alumina price of $400/t. In addition, we value the stock on 5x 1 yr fwd EV/EBITDA, which we think is reflective of a mid-cycle multiple. We use a mix of NPV and EV/EBITDA outcomes to arrive at our target price.

We highlight the following key risks to our target price. If the impact from any of these factors is higher than we anticipate, the stock could have difficulty reaching our target price while if the
impact is lesser the stock could trade above our target.

Aluminium prices - Alba's earnings are primariy driven by Aluminium prices. Any deviation from our base case could impact earnings either positively or negatively.

Cost inflation - Alumina is a key ingredient in aluminium production. Alumina prices have been subject to a lot of volatility of late and prices increased significantly lately. A rise in alumina prices is a concern as it could lead to
higher cost inflation and impact profitability. For context, alumina represents about c30-40% of Alba’s cost base.