GGG Economical History

The question has been raised regarding the below from a few new posters unfamiliar with GGGs history. But its starting to head off topic. So I thought Id offer a new thread if it helps with research. As there has been a long history on this stock to fully appreciate its scale of advancement to date up until where its positioned now.

The history of GGG is, as far as Ive witnessed it, depicted in the following advancements:

In May 2015 the capital cost was $1.1bill giving an IRR of 21%. Nothing fancy.

In Oct 2016 that came down further to US$832. Giving an IRR of 43%

In December 2017 metallurgical performance was also improved on the concentrate circuit lifting the concentrate from 14% to 21% with 78% recovery.

In Jan 2018 they simplified the leach circuit replacing a 3 stage down to a 1 stage process. So OPEX and Capex came down a lot.

In April 2018 the Chinese Technical institute managed to achieve 21.9% concentrate with 77% recovery.

In October 2018 civil works reduced 44% to US$175mill.

In May 2019 the Optimized Feasibility Study was released. Rare earth recoveries improved from 86% to 94%

.In July 2019 the Optimized Feasibility Study reduced Capex 40% to US$505 mill. generating $50US mill per year.(with a 10% buffer on top) over 37 year mine life on only 10% of the reserve.. This gives us the IRR we are at now.

Looking forward the only way that IRR would be maintained is via full finance.

Probably wed see 10% raise and 90% finance.

Remember the Capex is only $450mill USD and the revenue is $450mill USD per annum. So you can see finance pay down isnt high risk at all and could be achieved within a few years.The project would then become fully owned outright with massive cashflow with nowhere left to go.This would allow a near on 77%IRR to continue. Possibly reduced 10% with the cap raise. But I suspect when we get there we will find that with additional technical achievements wed find things would much remain the same as whatis set to be achieved right now.

This is of course without considering the big fish getting pulled in.The production cost is less than $4/kg and the basket price from memory was $17ish in the last OFS achieving this huge IRR. However uranium has boomed since then. So Id be expecting more in the basket price already. But the big one youd need to watch is the shift in Dy Pr prices. If the demand profile commonly accepted eventuates in magnet metals then who knows what the basket price could become.. Chinese reserves are already dwindling fast and not being restocked so youd assume things have got to start moving soon. The IRR would if so, exponentially explode.

If there was a further capital raise beyond 10% then sure the IRR would reduce. But youd need to consider too theres now less finance so theres no debt repayments or interest also due and a therefore a greater return back to the holders would compensate to a considerable degree. Where you save in one area youll gain in another.

The company could look at doing a Lynas and build a full separation facility. But really what need is there given the profits already. If the Chinese or the US are happy to take the concentrate and manage the rest for you and make a few extra bucks off the basket price. Then personally I wouldnt care given this level of expected profit GGG is set to already achieve on their processing as is and this gain theyd make I feel would pale in comparison to the value of the concentrate shipped due to rise in REE prices. Specifically dysprosium and praseodymium that could well be forthcoming due to an upcoming considerable magnet metal profile demand.

Hope it helps.