Broker note Dreadnought Resources Ltd (DRE)Initiation:...

Broker note

Dreadnought Resources Ltd (DRE)

Initiation: High-grade rare earth explorer

Yin shaping up to be high grade, scalableresource

We initiate on DRE with a speculative Buyrating and a $0.20/sh valuation. DRE is rapidly progressing the Yin Rare Earthsdiscovery at its 100% owned Mangaroon project in WA. We estimate the maidenMineral Resource for Yin could be between 15Mt – 21Mt @1.1% TREO and 30% NdPrenrichment. Furthermore, we estimate upside from Yin, the Sabre deposit, C1-C5carbonatite targets and the 100 other anomalies could see resource growth of afurther 20Mt. Should our views be confirmed, we see shareholder value comingfrom: 1) the development of a concentrate style operation like Yangibana; or 2)a strategic sale / takeover from a global or domestic major such as MPMaterials (MP:US, not covered) or Iluka (ILU, not covered).

Near term catalysts

DRE has a stream of near-term catalysts whichwe believe will support our investment thesis, specifically: 1) release of amaiden MRE on Yin by the end of CY22; 2) assay results from the C1-C5 targetsin Nov-22; 3) assay results from Sabre RC drill program in Nov-22; and 4) anupdate on the Y8 drill campaign towards the end of the year.

Investment thesis: Buy (Speculative), Valuation$0.20/sh

We initiate on DRE with a Speculative Buyrating and a $0.20/sh valuation. DRE recently announced the discovery of theYin rare earth prospect, adjacent to Hasting Technology Metals (HAS, notcovered) Yangibana deposit, a 27 Mt Mineral Resource at 0.97% total rare earthoxide (TREO) grade. Our investment thesis for DRE is supported by: 1) strongdemand profile for light magnet rare earths; 2) the potential for a maidenMineral Resource Estimate of between 15Mt – 21Mt @ 1.1% TREO and 30% NdPrenrichment, 3) further upside in C1-C5 carbonatite targets which baresimilarities to Mt Weld and Mountain Pass; and 4) a pipeline of promisingexploration projects in the Kimberley and Central Yilgarn.


My note.
There is no way any broker knows what resource might be uncovered moving forward to assume 40m tons. They would revalue the stock as it grows. Not a bad target based on the first JORC and confirmation of further discoveries/tons. The other news around various projects is anyone's guess to the value.

.115/sh

.20/sh

1		Recommendation:	Buy (Spec)	Previous Close:
2	Recommendation:	Buy (Spec)	Previous Close:	$0.115/sh	Valuation:	$0.20/sh
Valuation:
3	Recommendation:	Buy (Spec)	Previous Close:	$0.115/sh	Valuation:	$0.20/sh