Are we about to see take off ?, page-3

The EIA is undoubtedly the largest and most difficult milestone to see this project move into production.

All your normal junior mining milestones would remain (with their own challenges) including public hearings, white papers, mining license, FEED, DFS, offtakes (if not Shenghe), finance/FID. But all those are expected to flow much quicker/easier given the publicity the EIA approval should provide on the world stage in the current political environment with the REE cold war.

The current NPV is US$1.59b or roughly $2.2b AUD. This is not factoring in the significant capex and opex improvements from the past 18 months which would see further increase in that NPV. Add to that the recent commodity price increases. Also as we know this only includes covering 10% of the entire tenement.

So it’s hard to estimate what we will see as a SP increase if approved. The exposure could see a very strong demand pushing the price above 50c. However the price has already had some decent increase in the lead up to this announcement so it’s hard to say how much the market has factored in this positive decision already with a market cap already at $300m. Many would argue that a market cap between $600-800m would be justified at 25-30% of the NPV with the project being heavily derisked. Have a look at DEG, I’m not suggesting we’ll get the same ‘gold’ hype but they are sitting at $2b MC with just a lot of potential in the ground.

So my call is they will peak somewhere around 45-60c and initially settle between 40-50c. Very speculative of course, IMO. Exciting times nonetheless!