Ann: TNG receives EFA support for $300M for Mount Peake Project, page-61

Briefly,
1. V significant announcement. Dont see any merit in debating the semantics. No shenanigans in trade volumes beforehand either.
2. Peer comparison to ARU is instructive imo:
- same geography, comparable permitting/licensing, NPVs/IRRs are in similar ballpark (funding dynamics are dfferent but not radically), rare earth cf critical minerals, both have major project status, similar mine lifes, ARU has macq on lead debt vs KfW/KPMG
- TNG was ahead of ARU on feasibility studies, native title agreement, etc.. But ARU now ahead. Note sequence last year for ARU: 7 May for $200m EFA, 18 Jun for $100m NAIF. Headline $300m for TNG looks good on this basis, and wud expect Q3 NAIF announcement given the comp.
- ARU current market cap $450m, vs TNG $100m. Upside risks to ARU after-tax NPV of $1.4bn given NdPr rally looks structural. We dont know what TNG revised NPV will be, but lower than last $2.8bn, pre-tax IRR 33% given cost increases, both capex and operating, unless throughput scaled , mine extended, per digity1
- for argument lets give each $2bn NPV. then ARU is trading near 25% of NPV (3-4x rally past 2yrs). TNG is trading 5% of NPV, and flat/down even past 2yrs.
3. ARU def warrants a higher rating: it raised $40m equity last year, and looks on track for FID this year. TNG FID more likely 1H 2023 imo, and will require equity / mezz. Still the 5x multiple looks excessive to me, even allowing for market sentiment toward management. TNG has ample scope for sustainable re-rating as further milestones achieved
4. I remain confident on TNG funding overall, per earlier posts. both ARU / TNG have earned a social license to operate near Alice (where I grew up), whereas I doubt Tellus will. both can be great Australian stories per scooter99
best, gw