Ann: Makuutu Rare Earths Exploration Target Increases by 50%, page-66

IXR currently at 2.4c or Market Cap of approximately $66m

ASM SP hit an intraday high recently of $6.84. At that level ASM market cap was worth AU$814,300,482. It’s highest close was $6.74 the day prior and at that level was AU$802,395,504

OK you can’t compare apples to oranges as there are many things different in the resource, the OPEX, CAPEX, IRR, etc…
So far neither ASM or IXR have committed to solid numbers of production, plant costs, OPEX etc… but why was ASM valuation 12x higher than IXR? Scandium in IXR’s basket is a game changer and due to the fact that IXR resource stretches over 37km long they will have IMO at least 2 modules possibly even 3 or 4 at start of production. It might just come down to initial finance and offtake as to how many modules the start up production will have.

ASM has an agreement for USD$1m pilot plant 60:40 ratio between Dongkuk Refractory & Steel/ASM with output of 250kg per day. 250kg Reduction furnace
No offtake or strategic partner for offtake & financing yet. Dubbo project is yet to be built.

OK I realise what I am about to suggest is not accurate so before any knife throwing begins, this is just a simple comparison for back of the envelope numbers.

So if IXR were valued similarly which SF2TH has mentioned (Stage 1 ie:1 module @ $216m - $432m MC) could see IXR at 60% (IXR’s share of Makuutu) of ASM’s AU$814.3 m & would see IXR’s MC peak at AU$488.6m or about 18c. Take off a cent or two for Uganda sovereign risk compared to Australia.

But what if IXR started with 2 modules or more? IXR is still so highly undervalued right now. You could scale this valuation to the number of modules at start up of production.


I am of firm belief IXR will start production with at least 2 to 4 modules due to the size of the project. 37km is a large distance from 1 end to the other and the company has already hinted the scale of the project will increase substantially and is critical for rare earth companies driving better efficiencies and lower operating costs. Lowering overall CAPEX intensity.

Makuutu dwarfs AVZ Manono lithium project as a comparison in length.
AVZ (60% ownership) were looking at 4.5mtpa plant for 700 ktpa SC6 & 45.3ktpa lithium sulphate at start up. PLS 2Mtpa start up (300ktpa production of SC6), AJM 1.54Mt ore feed for 219 ktpa annual production.

This map shows a comparable distance from Sydney’s Central Train Station in Eddy Avenue to the western side of Mount Druitt via the M4 motorway (freeway). The time taken, which has various speed limits (east to west) from Strathfield at 80km/hr, 90km/hr at Olympic Park, 100km/hr from Wentworthville and 110km/hr from Blacktown to Mt Druitt. Supreme driving conditions. The finishing distance is close to Pine Grove Cemetery on this map.
I don’t know how long it would take to cover this distance on the ground at Makuutu but could well take an hour at least or more.

BTW for those unfamiliar, Penrith is the outer limits of Sydney where the Nepean River is roughly the boundary.