Why Do I Keep Buying:
**1. **Certainty of Project Completion:**
- I have absolutely no doubts anymore that the project will be realized.
2. **Upcoming Major Offtake Agreement:**
- There is another major offtake agreement pending, likely to be announced by the end of March.
- However, let's consider that there are only 4 trading days left, the announcement might even spill over into April; that seems more likely. I don't know for sure.
3. Investor and Bank Perspectives:
- Darryl mentioned that investors may not necessarily want another offtake agreement (I understand this sentiment; it's the same for me).
- However, banks feel more comfortable with additional offtakes. The recent presentation mentioned two ongoing offtake negotiations. Funding will facilitate these discussions.4. Simplified Financing backed with the finalized Government Funding:
- The government funding significantly eases the financing process.
- Banks now see only a small gap left to finance.5. NdPr (Neodymium and Praseodymium) Importance:
- While NdPr is crucial, the contracts have a floor price.
- It's not necessary for the price to rise before the end of 2025; it suffices if it increases at start of production and during production
- A low price before that could be problematic for other mining and resource development projects. Aru has a head start here.
6. Execution Remains Paramount, Execution remains the key factor.
- The recently secured government package is a significant first step. But we have to put all emphasis on getting things done. Hopefully we are not all waiting for offtakes and financing and let the other things (equipment supply, engineering and such with mow attention
7. Potential Takeover Scenarios:
- If there's a takeover offer from Gina or a white knight (as seen in past battles among mining giants), it could at a premium of around 60% or more.
- Given the resource's importance, a higher premium can be expected.
- We don't know when the offer will come. Until then, we need time for the gov. funding to settle; otherwise, it might raise suspicions. - Longer waiting benefits us, as it builds a higher share price basis for the premium.
8. Why a Takeover or a increase in shareholdings of existing shareholders or a new anchor investor might Be Likely:
- Coal is a declining industry. Not immediately, but in the near future. Iron Ore is also facing pressure. The technology and taxonomy related to CO2 and green steel will continue to advance direct reduction processes (such as melting more scrap metal rather than using the blast furnace route with ores). Australia supplies 90% of its iron ore to China, but China's economy is stuttering. The largest market for steel is infrastructure and construction which is currently at best stagnant and would be declining if not for the injections from the Chinese government. While machinery and renewables are other sectors, even if they grow by 5% or 10%, they don't match the weight of construction and infrastructure.
Consequently, the major players are seeking new secure income sources. And who is currently undervalued (with a market cap of below $500 million**)? Correct, **ARU**.
I bought some 200k more last evening in Germany. Maybe a bit too expensive (slightly over pari-price compared to Australia) compared to the more recent buys, but I think in the medium term that will not matter to my portfolio. I accumulated also steadily between 0,12 and 0,14 in January / February - which was looking at the low exchange rate to Euro in euro-currency really cheap.
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