Im still wondering: the primary focus for Vital will be the delivery of a Definitive Feasibility Study (“DFS”) and permitting for the larger Nechalacho Project.
Completion of initial economic assessment Q3 CY2023
Is this economic assessment for the smaller "stage 1/2" of the project (are they still pursuing the strategy of doing it in smaller stages in order to have a reasonable CAPEX?) or is this an economic assessment for the full project?
Because if its the latter, there was a study done years ago by the original owners that was approx $2B - and this figure will probably be more today with the increasing costs/inflation etc. (results wont make the market happy). Although i would assume they're sticking to the strategy of doing it in smaller stages? For some reason this company doesn't make things very clear and easy to understand
I would also like to point out: Following completion of the initial economic assessment, Vital intends to move directly into the DFS process. The basis for the DFS will be an updated MRE which will be informed by the results of the Q1 2023 and Q1 2024 drilling campaigns
This is telling me the DFS is a long way away, with the earliest being sometime in 2024. And the company has a history of not meeting deadlines
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I would also argue: Commencement of drilling at Nechalacho Q1 CY2023
If the companies primary focus is the DFS and getting the project on its feet - why are they wasting time doing more drilling and burning more cash in the process, because as i understand, the deposit is already huge ("world-class resource of 94.7Mt at 1.46% REO"). If the resource gets even bigger, its not going to make a difference if they cant do anything with it. See below research report from 2021:
VML acquired Nechalacho for A$14.6m in cash as part of its acquisition of Cheetah Resources in 2019. The project had previously been subject to a 2013 43-101 technical study and Feasibility Study by Avalon Rare Metals Inc, a Canadian listed company, which outlined a project with a post-tax NPV of C$900m for total capex of C$1.6bn.
With the experience of VML’s key executives including MD Geoff Atkins and COO Tony Hadley (both ex Lynas), the company has an intimate understanding of the critical risks and immense challenges of a traditional development strategy for large-scale REO projects. VML has outlined many of these in recent presentations, including: • project complexity and extended ramp-up periods to design capacity of 2–3 years • very high customer specification parameters, and consequent slow customer ramp-up acceptance of 3–4 years • substantial upfront capex and long-dated shareholder return realisation timelines
Notes: i have very little understanding of VML and just done a tiny bit of research flicking through some announcements
VML Price at posting:
1.9¢ Sentiment: Sell Disclosure: Not Held
(20min delay)