Euroz coverage on GGG, page-13

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Popeye82

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07/12/19

10:01

Post #: 41847196
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Originally posted by Sander51: ↑

Greenland Minerals Ltd (ASX:GGG) is advancing the Kvanefjeld Rare Earths Project in Greenland, which is the largest undeveloped rare earth deposit globally.
Euroz has initiated coverage on GGG with a speculative buy recommendation and a 55 cents per share price target.
The broker sees Kvanefjeld as a genuine Tier 1 rare earth project with an incredible mine life and production potential and a simple processing flowsheet.

The following is an extract from Euroz’ initiation report:
"Greenland Minerals Ltd (ASX:GGG) is sitting on the largest undeveloped Rare Earths deposit globally, the Kvanefjeld Rare Earths Project in Greenland;
The multi-element deposit has a JORC (2012) Resource of 1.01 billion tonnes at 1.1% Rare Earth Oxide (REO) and 266ppm of U3O8 for a total of 593Mlbs of contained uranium, the 5th largest total uranium resource globally;
Recent optimisation work on a 2016 Feasibility Study demonstrates compelling economics with operating costs 3x lower and capital intensity 5x lower than ASX peers;
REO production is 2x peer ave. at 32ktpa with by-products of 1Mlbpa of uranium and 15ktpa of Zn concentrate over a 37 year mine life;
Based on a REO basket price of US$19.55/kg, we estimate annual EBITDA >US$450m and calculate a post-tax NPV10 of US$2,069m with an IRR of 77%, comparing favourably to current EV of US$90m;
Updated flow sheet has been optimised in conjuction with supportive shareholders Shenghe Resources, a fully integrated Chinese Rare Earths producer with extensive knowledge of Rare Earths processing;
The orebody is non-refractory, unique to Rare Earths deposits meaning that metallurgy is excellent from simple leaching with REOequivalent recoveries of 94% yielding a wide range of critical “magnet metals” Neodymium, Praseodymium, Terbium and Dysprosium elements;
Rare Earths demand is growing given their use in permanent magnets for electric motors and wind turbines;
China dominates downstream processing of Rare Earths, making it a critical mineral and of particular strategic importance globally;
Greenland is developing into a mining friendly jurisdiction, with the government supportive of Rare Earth and uranium extraction;
GGG has made significant inroads into obtaining a Mining License for Kvanefjeld which we expect delivered in CY20, allowing completion of BFS and FID shortly thereafter;
Our Valuation of $0.55/sh is based on a DCF incorporating recently published optimisation numbers and risk adjusts this by 60% to reflect uncertainty around Mining License and funding;
We Initiate Coverage with a Speculative Buy recommendation and $0.55/sh Price Target. As the largest undeveloped Rare Earths project globally with outstanding metrics, we see potential for Kvanefjeld to become the world’s leading Rare Earths mine"
do not advertise external links.au/...-of-kvanefjeld-rare-earth-project-908312.html
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underlined U-price is pretty high, as for me.
GGG Price at posting: 13.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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