Be careful is my opinion. Everything has in the DFS has gone up...

Be careful is my opinion. Everything has in the DFS has gone up ~25%, including commodity pride assumptions. Well, rare earth prices have certainly gone up higher for longer anyway... they chose not to give any details around the zircon and titanium mineral price assumptions that went into the long-term price of US$530 per tonne. As an example, NdPr (currently under US$100/kg inc VAT) is now extrapolated from $205/kg in 2030 up to ~$250/kg by 2035 in the base case.




The specific price assumptions assume 2030 prices out to 3025, then 2035 prices out from 2035. Note, these prices are 2022/23 Real... that means these prices are BEFORE actual inflation! This means prices toady ~US$100/kg NdPr need to double in real terms over the next 7 years, then add another $50/kg over the following 5 years to meet revenue and NPV etc. 2/3 revenue is from rare earth products, so where RE-prices go so does VHM. Not liking the $150mpa operating costs or $485M capex against currently lower RE-prices, but at least it's about half HAS and some of the hard rock developers are staring down the barrel at.



Coming after Tesla said it was moving away from RE-permanent magnets earlier this month, these are heoric assumptions indeed. Been much angst about Tesla's guidance obviously, and much push back. Especially by Adamas Intelligence, whose price forecasts well-paying clients use in this type of DFS, and who obviously realised anything less than a full Tesla takedown would kill the burgeoning fee paying RE developers upon which Adamas live on...

Still lots of approvals, some more risky and potential for delay than others, especially water and logistics of REMC. I'm a bit surprised at the ongoing cost inflation of what looked a relatively simple project, but in Australia these days probably shouldn't be. My strategic thinking around RE-perm magnets and the EV industry has changed post Tesla, which I think is the far bigger risk. Niron's new iron-nitride magnets could be the RE-mag killer puts most of the Wim deposits back into hibernation. It's still a very interesting space.

GLTAH