Ann: Colossus Cupim South Step-Out Drilling Yields Best Results, page-30

the valuation between MEI and VMM. Has generally maintain a ratio around 1:4 and 1:5 after the initial surge post drilling. This was based on many factors :
- The overall advanced stage of Mei ( scoping study easy due January 2024)
- overall resource size along with tenement size

the first step in the process was MEI showing to the market it could produce TREO and mores specifically MREO at a low cost. The scoping study illustrated this. However, the capex combined with the spot based basket price resulted in a Npv discounted at 8 percent to be 16 mil usd and even at the forecast price equivalent of TREO of 45 usd/mt and Nd-Pr equivalent of 111 to be 699 usd (both post tax) whilst there is plenty of scope to improve these figures just on tax incentives, utilising Vmm METs progress and increased focus on >4000 ppm over the length of mine. This would significantly improve the project economics at current spot prices.
Now this is where I believe VMM. Becomes more attractive from a risk reward perspective. MEI scoping study showed it was significantly overvalued because the majority of iit’s resource is not viable. The market is going to be focusing on the >4000 ppm or above resource and preferable the 4500 ppm throughout LOM. The target is 100 mt if Measured and indicated at 4000 Mt preferably closer to 4500 ppm.
Vmm has 47 MT (inferred and indicated) at 4000 ppm. It has 28MT at 4450 ppm - both mreo at at 29-30 %.
This doesn’t include the recent high grade results that will significantly expand the 4000 ppm grade average and have at least 50 MT of the grades closer to 4500pm. There is also the Tamayo prospect. We know the plant is based within the northern concessions with state and municipal agreements in place. Municipal approval is required to obtain state approval. There is no part of any of the resource within any environmental encumberments. Further the cupim south expansion is not within the APA BUFFER zone or the sanctuary. when one is trying to reduce costs, every aspect counts as these issues can increase costs and cause delays.
I personally hope VMM infill drill the cupim south expansion and have a measured and indicated component to utilize in the scoping study as it will dramatically improve the project economics at spot prices.


the market is now recognizing that at market lows, vast majority of non- Chinese REE projects are not viable. In a commodity down cycle, it is natural for an exaggeration of price action as existing supply exists the market creating a short term surplus before production restrictions cause the market to revise prices. This is what appears to be happening now as oxide producers are no longer willing to sell to manufacturers at the discounts as we say in the last 2 months causing it to overshoot below the 51 usd/mt levels. Despite Vmm being a potential producer in 2027/28, Sector sentiment is important and market needs confidence current sport price are unsustainable.