HASTINGS TECHNOLOGY METALS LTD (ASX:HAS) - Ann: RIU - HAS Yangibana JV with Wyloo, page-25 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by curlednoodles: ↑

*This joint venture (JV) agreement between Hastings Technology Metals Ltd (HAS) and Wyloo presents both positives and potential concerns for Hastings shareholders. Here’s an analysis:
Why This Could Be Good News for Hastings Shareholders:
Debt Reduction & Financial De-Risking:
The JV includes the cancellation of all exchangeable notes owed to Wyloo, which would have matured in October 2025 with a face value of ~$220 million.
Hastings avoids the risk of major dilution from raising equity to repay this debt.
Wyloo, a well-backed private entity owned by Tattarang, will help finance project development, reducing Hastings’ immediate capital burden.
Project Acceleration & Expertise from Wyloo:
Wyloo will act as the project operator, bringing technical and financial expertise.
Given Wyloo's experience in critical minerals, it could enhance project execution and increase confidence in financing and construction.
Hastings Retains 40% of Revenue & Cash Flow:
Despite selling a majority stake (60%) in the project, Hastings still holds 40% of rare earths, niobium, and other by-product revenue and free cash flow.
The project has an NPV11 of $865 million, an IRR of 31.28%, and is expected to generate $258 million EBITDA per year, suggesting a strong long-term revenue stream even with a minority stake.
Niobium By-Product Revenue Upside:
The Yangibana project includes high-value niobium, a critical mineral with increasing demand, particularly in high-strength steel and next-generation lithium-ion batteries.
Niobium could provide additional revenue diversification beyond rare earths.
Reduced Equity Requirement for Hastings:
Hastings' remaining capital cost is now $126 million instead of the full $316 million.
Depending on project debt financing (target 50% gearing), Hastings' final equity contribution could be as low as $13 million to $32 million, easing its financial burden.
Future Expansion & Saudi Arabia Potential:
Hastings will retain a 40% interest in Stage 2 (Hydrometallurgical plant) and maintain the option to pursue downstream processing in Saudi Arabia.
If this materializes, it could further increase the project's value and provide additional processing revenue.
Why This Might Be Concerning for Hastings Shareholders:
Loss of Majority Control (Wyloo Gains 60% Stake):
Hastings is now the minority partner (40%), giving Wyloo control over strategic decision-making as the project operator.
Wyloo also has the option to increase its stake to 70%, further reducing Hastings' influence.
Valuation & Exchange Terms Favor Wyloo:
Wyloo is effectively buying 60% of the project by cancelling $220M of debt.
Hastings also gave up its 19.99% stake in Neo Performance Materials (~$79.8M) as part of the exchange.
This could suggest Wyloo is getting a favorable deal at a time when the rare earth market is weak, but Yangibana’s long-term value could be much higher.
Potential for Further Dilution:
If Hastings fails to meet capital calls, Wyloo can dilute Hastings' ownership further.
Wyloo also has a right of first refusal if Hastings tries to sell its stake.
Uncertainty Around Saudi Arabia Downstream Plans:
The Saudi Arabia processing plant is still non-binding, meaning it may not happen.
If it doesn’t materialize, Hastings might miss out on the higher-value downstream revenue.
Final Verdict:
Short-Term View (Next 12-24 Months):Positive
Hastings eliminates a huge financial risk by cancelling its $220M debt, securing a strong JV partner in Wyloo, and keeping a 40% stake in a highly prospective project.
The lower capital requirements make it easier for Hastings to progress without heavy dilution.
Niobium presents additional revenue potential, making the project more attractive.
Long-Term View (Beyond 2026):Mixed
Hastings loses majority control, which means less influence over future decisions.
Wyloo's option to acquire another 10% at a fixed price could undervalue Hastings’ stake in the long run.
The success of Saudi Arabia downstream plans will be crucial in determining if Hastings retains long-term upside.
Conclusion:
For existing Hastings shareholders, this deal de-risks the company and ensures the project advances without excessive dilution. However, long-term value capture is now partially in Wyloo’s hands, meaning shareholders should closely monitor Wyloo’s next moves.
*gpt40

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I wish people would stop reposting HAS's wild assumptions about NPV and EBITDA. These are based on an NdPr Oxide price of US$121/kg, more than double today's prices. Imagine if every wanabee gold producer used US$6,000/Oz for their financials, or potential iron ore projects used US$200/tn for their numbers.

I hope once Wyloo take over the project, we start seeing some realistic numbers based on todays NdPr prices, then we can judge the real financials and understand what chance it has of going ahead.

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0.285	5000	1
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(20min delay)
Last 29.0¢		Change -0.010(3.33%)		Mkt cap ! $54.77M

Open	High	Low	Value	Volume
29.0¢	29.5¢	28.5¢	$41.18K	142.0K

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