Been a while since i popped in but have noticed lots of new posters which is great, welcome aboard.
Additionally have seen a bunch of commentary on a number of items so thought i'd drop by and link some of my old posts which have my opinions/thoughts on a few of these fronts.
Appreciate the call outs from a few posters referencing some of my research as useful but can appreciate it isn't always easy to sleuth through. The below should give fresh and potential investors a starting point. Most of the cited post will have a labyrynth of cited posts to work into.
1) Resource estimations:Existing tenement esimation below
i have made estimations on each of these in Post #:
48553463 orginally posted Post #:
47472353Noting that i had assumed in the realms of average minerilisation depth of around 6m's which seems a little high on the western area's and a little low maybe on the large eastern zone.
Totalling them up.Central Zone:CZ1 = 78.4mT inferred.
CZ1 Extension (new results) Area F in report = 6.5m depth 400x400m spacing = 24mT @ 776ppm TREO
CZ2 (area g) = 626 ppm @ 7.6m depth 400m x 400m spacing = 9.7mT @ 626ppm TREO
CZ3 = 4mTCZ4 = 7mTCZ5 = 12.5mTEastern Zone total = 135.6mTEastern ZoneEZ1 = 8.6mTEZ2 = 11.5mTEZ3 = 48mTEastern Zone total = 68.1mT (assumes 6m depth on sattelite minerlisation)Western ZoneWZ1 = 14.4mTWZ2 = 10mTWestern Zone total = 24.4mT (assumes 6m depth on sattelite minerlisation)On our new tenement TN3424 refer to Post #:
48889487Was doing some estimation and decided i wanted a clearer understanding of the potential mineralised ore body the TN3424 presented.
Note this is pretty archaic but a fairly decent estimate that the 78mT is over an area of around 3.8km2. I used the close up reference with the scale and some datum point to infer rough size. This is the MCZ btw.
This seems kind of ballpark given mineralisation depth average is around 7-8m. so 3,800,000m x 7.5m depth x SG of clay/dirt (2.7) = 76mT. Note to convert to total contained tonnes you'd then need to apply a ratio of the SG in comparison of host rock in comparison to SG of rare earth. i.e. SG of rare earth lathanides is about double that of clay.
Regardless, that seems like an ok starting point.
Let's measure the new tenement.
so we have 27km2. This is roughly 6-7 times larger than the existing 78mT.
Looking visually, i don't think we'd expect 7.5m's average depth all through there but tbh that's only looking are the aero surveys. it could be better or worse depth in parts.
However, if we assume that maybe only 20km's of that area has mineralised ore body (noted the non blue area's) and if we accept maybe average depth of 5m's we end up with
20,000,000 x 5 x 2.7 = 270mT @ ???ppm.
Obviously will be higher depending on how wide spread any REO are and secondly depth. But if you assume fairly conservatively on both there's still a potential for 270mT in the new tenement.
I haven't re-validated with more up to date data points which stakx also had asked if anyone had done. Would be good to firm up the area from the radio imagary but that abouts where i landed.
Explorations results currently in line with exploration target. Seesm to indicate the 270-500mT is roughly where they expect the mineral upgrade to land. Post #:
48890327 and Post #:
485534632) Economics and therefore S/P valuationSpecifically economics. Post #:
49210076 is probably the most up to date post which talks through start to finish economics, but is not updated for spot pricing.
I repeated this with some more context in Post #:
49360333 and priced in some increased recoveries. is probably the comprehensive download for how i computed the revenue figures with all inputs.
on those posts i was asked about recoveries Post #:
49371865and was also asked about my NPV based on development cycle.
Finally, i updated the basket pricing, and additionally gave my personal view on the valuation of makuutu.
People will need/can apply their own P/E ratio's and additionally their own % of project valuation. lastly people will need to decide whether the factor IXR off its Y1 production profile or Y7 as this is 4 times as large thus the NPV is four times larger.
Post #:
49371250
"
2.5mtpa - (year 1 of production)60M AUD profit p/a. So P/E ratio of 10-20 is 600M to 1200M in Y1 of production.
Take 60% ownership and we're at 360M to 720M valuation in Y1.
IXR is at stage 1 thus IMO around 15% is fair valuation of NPV (off PE valuation model).
i.e. 15% of 360m-600m = 54M-108M10mtpa - (year 7 of production)240M AUD profit p/a. So P/E ratio of 10-20 is 2.4bn to 4.8bn in Y7 of production.
Take 60% ownership and we're at 1.4bn to 2.8bn valuation in Y7.
IXR is at stage 1 thus IMO around 15% is fair valuation of NPV (off PE valuation model).
i.e. 15% of 1.4bn-2.8bn = 216M-432MSo in my view IXR should be valued between 54M-432M at current junction.Note all the above calculation are based of production throughputs above what the company has recently announced.the variable between that is essentially whether the market wants to factor in the 10mtpa output scenario which is the growth and secondly whether the market thinks that IXR will opeation with a margin of 30USD for LOM.
In my honest opinion, i think rare earth pricing will eventually settle a little once market see's new supply coming only but in the short term there is going to be a very real shortage.
Note;
That the above valuations of MC as function of NPV are only 15% of P/E ratio. If IXR was to secure offtakes this de-risks the asset and thus i think around 25-40% of NPV becomes appropriate which almost doubles these values."
comparing by resource size to biolantanidos. Post #:
48562067.
"
I explain my thought regarding NPV in Post #:47711645 specifically comparing to Biolantanidos in Post #:46047146 and then clarifying why i had applied higher opex cost in Post #:47922593.Whilst one might want to compare the resource size and then apply a linear relationship this isn't always a great way to work out fair value IMO. It's certainly a good first pass, but just because you have say 10 times as much contained resource doesn't mean you should be valued at 10 times the amount. Mining companies eventually get valued at their revenue or more specifically their profits IMO, so whilst it's fine to say IXR will have a resource 10-20 times the JORC of Biol applying a 10-20 time value figure solely on that is just lazy. If you actually look at expected revenue of product, throughput and make an estimate for operational cost you can actually construct a rough cut NPV which is what i have done in the past.
Also worth noting when converting potential economics and delineating a valuation for the stock IMO it's important to take into consideration the development stage of the project. i.e. just because you have an NPV of X does not instantly mean you are valued at that price.
I explain this and give a rough estimate of value in relation to NPV in Post #:
48658073 (different stock) but principles are the same. My rule of thumb is as per below.
Also
"my general rule of thumb for (FAIR VALUE) S/P as a function of NPV is as follows.
1) SS/PFS performed, no offtakes, no finance = 10-20% of NPV
2) DFS/BFS pilot plant no offtakes no finance = 15-30% of NPV
3) Either of the above with offtakes secured = 25-40%
4) Any of the above with finance secured = 35-50%
5) in construction near term production = 50-75%"3) ChartsViews were posted here and remain fairly aligned to that.
Post #:
494071524) Peer comparison on revenue Post #:49471072As i have said a few times, using same assumption to compute IXR revenue where i land within $1 of the
company i can't replicated close the revenues of any other rare earth company.
Hint;
It should be noted that these companies do have different opex values. Most often less than the 10-15USD/kg that biol and ixr will have. But i guess the point comes down to margin. If pricing halves then IXR might will moved from 45USD down to 22USD still making them $10 USD/kg. Halving the price for the rest puts them underwater IMO if you look at their actual opex/aisc.
View attachment 2752463some comments to the above NPV for IXR above calced on FCF basis with 10% discount rate.
PM8 was a presumed rough rough cut guess at their BFS figures (it's 2-3months old now and i only spent 2hrs on it so maybe not that accurate). ARR i gave a leg up with assuming higher concentrates than they will be able to produce. And also note the table hasn't been updated for a few weeks as i don't have much a need to compare to peers anymore and IXR being ionic clay is an outlier, it's economics are quite different with a higher opex but much higher margin.
Apologise if some companies are out of date, people can refer the the company announcements for data but in short i think their PFS/DFS figures (which is what i grabbed were inflated. even at current pricing with 50% payability, on their purported concentrate it's still alot lower than the PFS/DFS. At a glance PM8 looks economic maybe NTU and tbh their MC have priced that accoridingly, also a little more developed too so that makes sense.
On other notes.
was positive to see those retention licences all come through and we had some spurious non-holders raising some concerns. When i see genuine concerns from genuine posters i'm all for it. However this account was created recently posted only on IXR and basically sewing seeds of doubt, meant that depsite the risk being a possible reality was with ill-informed intention but never the less all good now.
Stoked with Tim being the MD. IMO he is the sole driving force behind this project and team currently and i would not even be surprised if in the next 6-12 month we see some of the other board/director step aside to allow some fresh expertise. I speak with Tim frequently always willing to respond and promptly, the above is IMO and has not been discussed so i'm going out on a total limb there, but some fresh blood to the project might be of use, it certainly worked with Tim being appointed, OVL now IXR done a full turn-around and i don't think it would have happened without him.
For disclosure i have invested approxcimately 15-18 months ago and average is below .6c and i have subsequently already free-carried as i would indicate i would. This was done some 3 months ago in the previous run-up. I now intend to hold this through to production so my timing is 2-5years.
From the aforementioned i truly believe IXR current MC should be around 150m. Which would be factoring a production profile between Y1 and Y7, and being based off an NPV with only 15% valued attributed. The change of tact with the SS IMO is with the H2S04 process circuit we will increase opex cost from around $10USD to maybe $15USD. This however increases our recoveries therefore increasing product which comes out the back end. So essentially they've opted for a smaller margin but higher overall throughput (tick). When i say smaller margin their expected concentrate basket is currently $60USD.
60usd/kg basket for concentrate.
assume 75% payability takes it to 45usd revenue (real).
expect opex to increase with the H2SO4 as part of the circuitry in comparison to Biol.
given book opex is $10usd roughly maybe ixr around $15usd/kg.
that's 30usd margin. 1000tpa ramping to 4000tpa.
aka 30m USD profit moving to 120m USD profit. p/ascandium not added either, 20-80tpa worth around 25-50m usd depending on concentrate grade of scandium.
(note this throughput is based of recoveries of around 46% as presented in presentation), there's large improvement of throughput with increased recoveries.)
Low recoveries (data from company presentations)Feedstock is 840ppm TREO. Meaning 1T of dirt has 840g of TREO.
At 41% recovery every 1T of dirt i put only 344g of the 840g is recovered.
Now to produce 95% concentrate you need 950g of TREO in 1kg of liquor.
So 950g/344g =
2.76In summary I need 2.76T of dirt at 840ppm with 41% recovery to produce 1kg of TREO 95% concentrate.
High recoveries (data from company presentations) - with 70% recovery.Feedstock is 840ppm TREO. Meaning 1T of dirt has 840g of TREO.
At 470% recovery every 1T of dirt i put only 588g of the 840g is recovered.
Now to produce 95% concentrate you need 950g of TREO in 1kg of liquor.
So 950g/588g = 1
.61In summary I need 1.61T of dirt at 840ppm with 70% recovery to produce 1kg of TREO 95% concentrate.
What does this mean for economics?
Well the 2.5mtpa is your fixed throughput at the front end of your plant. Thus 2,500,000T/1.61 = 1552T.
This is how much you'd get out your back end with the 70% recovery of product instead of ~40%.
Increased recoveries moves it from 1000tpa in Y1 to 1500Y1 aka 50% increase on profit.
scandium?Scandium again re-inforced. "Scandium co-product potential at Makuutu is very accretive for negligible additional processing" Also called out 20tpa production expandable up to 80tpa. Scandium referenced on a couple of occassions here. i discussed briefly (only 5 paragraphs) here Post #:
46322129 Post #:
46323281 and put some rough $$$ values with recovery calculations and throughput Post #:
46383158. For context in those cited posts a company was projecting 75M USD revenue p/a from 38tpa scandium production
If IXR can produce a scandium by-product around 20-80tpa with slim to little additional opex the opportunity there is huge, could almost double profit. Huge. But i expect they will sell a lower concentrate product. Recommend viewing the embedded post where i calculate something a bit more conservative with figures included. More info is required here, namely around what % concentrate the scandium would be as this impact price received material but can use the above snip as a rough indicator.
There's a lot of numbers to go through but in short below is my assumptions summarised.
Opex costs - $10USD without H2S04 in process circuit. $15-17USD with it in
Recoveries - 41% without H2S04. 70% with (company announced)
TPA - 1000tpa REO in Y1 moving to 4000tpa in Y7. (this will increase byb 50% with increased reecoveries)
Revenue for product - (Around 40-45USD without scandium will increase with it, amount unknown need more info but minimum 5-10USD IMO)
Capex - around 30-45M USD for a 1000-2000tpa throughput with potentially another 30-45Modd to expand to 4000tpa. Regardless, Biol priced their capex for around 30M USD for 1500tpa so it's very very cheap.
That's about all and a bit of brain dump of information. If people want specific information regarding IXR, use the advanced search and search my name with some key words. I don't think there's a facet of the project i haven't posted 5-10 items about.
SF2TH
(20min delay)