Ann: Additional critical mineral stream doubles Toliara's NPV, page-6

Listened to the second sales pitch session. No different to other RE desperates in cycnical spin I suppose, where RE feasibility studies are like standing in a hall of mirrors. Given that Tolliara has the lowest cost monazite production, similar to other mineral sand deposits with previously waste-monazite now a biproduct, I expected more clarity despite recent history with BSE.

Nope, seems if poor prices/results corrupt management commentary, terrible prices/results corrupts terribly. Good to finally be told the share price run-up Easter 2022 was after they signed an MOU with Madagascar on Toliara deal, makes sense. And that MOU sat there un-moved for 6 months until it became clear the Mining Code negotiations made finalising any deal virtually impossible (ie August huge sell down while BSE was telling the market how close a deal was).

Anyway, that’s ancient history now, its reality vs spin that matters to investors moving forward. Plenty of issues with commentary in the PFS and presso gilding the lily so to speak, mostly around the reality of pricing and off-take options.

The REO and Monazite-Con price chart is the most ridiculously obscured I’ve ever seen. The critical relationship between NdPr-Ox price and Tolliara monazite sales price is on a scale that needs a scanning electron microscope to read. Most people in the market will ask “what NdPr-Ox price have BSE assumed and what is the NdPr price now?”… both for context now and to comp other REO proiducers who clearly reference their NdPr price assumptions.

Without pulling out your hand lens, can anybody quickly tell me what the NdPr price assumptions are over 2023 to 2038 and beyond?


Of course not, and nowhere in the entire PFS document does it state any specific NdPr prices, readers have to scale it off that chart and guess, fking ridiculous.

35% REO payability in mon-con was only back-tested to Q3 2021 because “we couldn’t find any data before that” they said… BS, here is ILU’s chart defining Eneabba basket price payability going back to 2015, except it doesn’t suit BSE purposes regards mon-con pricing or payability (which use to be <30% for ever). Toliara and Eneabba are very closely matched for basket price as coincidence has it despite different assemblages and TREO % in monazite btw.




US$5,900/t Mon-Con “Spot Price Assumption” like other PFS prices are Net of VAT (ie with 13% Vat tax removed) and so are really 13% over-stated with reference to any quoted China monazite prices (and there has never been any prices to reference except China). So $5,900 is really US6,670/t inc 13% VAT, as quoted in charts and websites ex-China. Same for the prices of NdPr, Dy, Tb etc in the PFS (although there is only a chart, no prices stated as I said).

Ex-China monazite pricing (the ONLY pricing last 15 years) is useful but corrupted by strategic considerations and much lower cracking/refining costs than the west (eg ILU). Strategically, China is happy to pay over the traditional payability % of contained REOs in mon-con because they make so much money from downstream processing, refining, magnet production and then value-add into all the products that use RE-permanent magnets. They are happy with low REO prices and over-paying for monazite spot cargoes, although any large off-take deal may or may not be so generous compared to spot?

It's a lot more complicated for BSE than I want to drill down into atm, suffice to say the question of who, where and for what price they can find a Tolliara off-take is a vexing question with a probably obvious answer. Meanwhile, here’s my effort to zoom in and do some maths on the PFS pricing assumptions and implications for NPV. For various reasons and my own opinion, I see a price <$100/kg NdPr-Ox (and proportional for DyTb) Net of 13% VAT aas the LT price, which adds ~ US$500M in NPV10% real for the Toliara Monazite biproduct rounding off for the usual slippage and cost reality at this early stage. Still a bloody good outcome, just not the what it says in the advert...