Not looking for a fight, too much on for posting HC atm anyway....

Not looking for a fight, too much on for posting HC atm anyway. Keep a very distant eye on the REE market for various reasons, google rare earth news occasionally to see what's happening and saw AR3 come up with a results release (never looked at them before. Treated myself to a couple hours distraction.

Fully diluted MC of ~$150M isn't nose bleed in this bull market, but all I see here is red flags from an economic perspective. No view on IXR except they are an obvious ionic clay hosted REE player further ahead to comp against. Red flags for me on AR3 are:

Recoveries require an average 150kg/t of H2S04 from the 5 samples provided to date (to reach a pH=1 which is as acidic as you can get remembering my school chem). That is 15 times more sulphuric acid per tonne than IXR's Makutu project which uses "5-10g/L H2SO4". Sulphuric acid is a (if not the) major consumable operating cost in the production process. Whatever hydromet process is used, it's always the processing not the heap leach stacks that costs.

The strip ratio for AR3 is between 1.5-2:1 on historical and recent drill results. It may get better but it may get worse, that average is from 'significant intersections' which excludes all the low grade, absent, and/or thin intersections in between. IXR Makutu scoping study has a strip ratio of 0.75:1, because the deposit averages 6m thickness instead of <2m thickness.

Very thin strip mining deposits present a problem of 'footprint' LOM capex to production rates. All the costs to acquire mining/access rights, strip top soil and sub soil, then replace the lot and rehabilitate is not cheap. All that per hectare for a 2m orebody and 2:1 strip... I don;t think so.

When infill drilling inevitably averages down of the higher grade intersections with lower grade intersections the clay unit AR3 has looks very similar sub 1000pppm as all the rest of ionic clays around the place (but without Makutu's scandium by-product credits). Australia is simply not the cheapest place to mine and operate in imo, first world standards, wages and all the other overheads etc.

Maybe it's an exploration play looking for that sweet 6m thick deposit of continuous, high grade TREO. Maybe there is some met breakthrough I don;t know in the wings that doesn't require fuming pH1 H2SO4 leach liquor? I have no view on Makutu, in fact a negative view of the REE price longer term, so fwiw I'm not here to cross promote anyone. Just some projects look hail mary unlikley, and some companies look way over-valued to an old school analyst.

Good luck.