@Samba1978 ...."
Is it worth selling some ENR and investing something in DRE?"
None of us are allowed to give 'advice' on this forum. However if the question was would I sell some ENR to get into DRE, my opinion would be not to bother. I don't currently hold either, but for me which one to purchase would be more likely ENR.
Reasoning...
DRE has some more long thin sections of weathered carbonatite, that is not overly rich in grade or very thick with the higher grade. A few 1% hits here and there do not make a viable prospect to build an expensive mine in what could be a competitive market if lots of players try to open mines in competition with CBMM who produce 85% of the world's Niobium.
IMHO WA1 will work with CBMM to make sure the world has a continuous adequate supply of Niobium at a decent stable price for existing miners and customers. I would expect that if ENR find something very decent, say 10-20Mt of high grade (>2%) weathered ore, then deals will be done between ENR and WA1 to build just one mine and processing plant. It would be stupid and a waste of resources for both to build separate plants in the middle of the desert, then go into competition with each other and CBMM.
Mind you, I have seen lots of stupidity over the years in companies setting up mining operations, the classic example was Pilbara and Altura both going into debt to build separate plants on effectively the same ore body that happened to straddle the tenement boundary. Altura went bust because of this stupidity.
....
Firstly ENR have to find a lot more decent grade mineralisation, and the area generally obviously has high grade around. E..R have some great sniffs/indications so far
DRE has it's 'high grade' sections of 1.0-1.4% but only 3-15m wide mostly, with a few a bit wider, not high enough IMHO for setting up a mine concentrating on Niobium.
I'm sure they will find more, but without a large area of high grade, it is probably marginal at best..
One aspect, that no-one is thinking about, is what if there are several new major finds of Niobium, all large high grade resources. Suddenly the whole Niobium supply is plentiful if they all set up mines, and the price of Niobium would crash with CBMM being possibly the only profitable mine, or anyone else with close to their grades. This also makes the ENR/WA1 combination the only viable option for longer term success as WA1 have the size and grades, with ENR having some very decent grades, but not yet the size..
Worst case scenario for ENR is probably a couple of satellite pits that WA1 could use, so there is already 'some' value, but a lot of area to still explore, and I'd expect everywhere between P2, Hurley, Green and to the South West to look like Swiss cheese before they give up the hunt for more..
DRE could find more of the same spread out over their 17km of strike, all being thereabouts but not quite enough to mine, therefore being a waste of money in the longer term.
As I don't currently hold either, I'm looking for the right entry signal back into ENR, I'm not looking at DRE with anything other than interest, and as I stated earlier, if they did find a lot, then perhaps the whole Niobium sector is not worth investing in because of the competition created.
Given 70 years between major finds of high grade Niobium deposits, I suspect that the only likely candidate for a lot of Niobium is ENR being all part of whatever complex created Luni....
ENR is certainly very highly priced for a company without any resource, realistically still just a junior explorer spending cash 'looking'. Maybe the finds so far add up to something decent with further drilling, but again IMHO none of the existing areas will come close to LUNI. I sold my shares in ENR when the Green results were not as stellar as many hoped for (including me) as I expected the market to knock the price down. All the drilling is expensive and despite the cash in the bank in the quarterly, doing a lot of drilling and the follow up assays is going to rack up the bills quickly. ENR does have an impressive spend in the ground compared to staff, corporate and admin, so that's a plus..
Sorry for the long ramble, I'm still trying to get the justification for holding/not holding ENR straight in my own mind. Without a larger, wider indication of high grade Niobium, I suspect the SP to continue drifting, $200m for an explorer is too rich. With some really decent hits, like 50m+ at well over 2% over a wide area, then it gets re-rated up. This means finding an intrusion, compared to the dykes/fissures found so far, to add real value and boost the SP.
We have to also remember that WA1 was only valued at $250-300M last year when it was obvious they had a large Niobium deposit spread over a 2.5km X 1Km area, with only continuity of grade and thickness not fully understood. ENR is not that far off those price levels now, but without the resource, so a few poor results could see the SP go down a lot.
(20min delay)