Hey can one of you link me to the any DD done on VML? I'm a little later to VML but like the sector and have positions in REE, ARU, HAS, PEK as well.
A quick summary of my thoughts I whipped together, any fact checking welcome!
REE - had a big catalyst possible with WN drilling near Lynas deposit, but that fell through. Now has an ok rare earth deposit and a gold play, but there are better options out there at the moment. Best catalyst there is now the gold deposit.
ARU - seems great on paper but the size of the capex is a hard pill to swallow I think for finding financing given other available options. Seems like a hurdle that may be harder to get over and likely funding will go elsewhere first. However as some of the competitors secure funding, the expectation ARU may finally get its investment increases. However I expect (I may be wrong) we will have the time to roll profits from other picks into ARU later.
PEK - Just an amazing company. Great drilled out Bastnaesite deposit, economics worked out and have the flow sheet organised right the way through to the separated product so don't have to fluff around with partners. But massive question mark around Tanzania and the mining licence. If it comes through then this company will be hunted by the majors. Their option on the teeside refinery expires in October so they need the Tanzanian government to move in the next couple of months. CAPEX 365m, 26yr mine life, BE 32.24, 2.81kt/pa
HAS - The latest drilling is showing the potential that their deposit size could eventually approach PEK, but still lots of drilling to go and still building out the resource estimates. Permitting done though and the latest results do seem to confirm that the two deposits are actually just one big deposit which is exciting. However the deposit style as far as I can work out is only partially Bastnaesite, so the economics you would expect to be tougher. Due to a lot of the offtake partners for their MREC already being in motion financing is much more certain. However going through their numbers, they say payback is <4yrs but I can't find the expected price for the concentrate. CAPEX 449m, 13 yr min life, BE ?? (Depends on offtake agreements, sell MREC currently 60% offtake covered) 3.4kt/pa
VML - Great approach with the low CAPEX. Not much details on how much they are planning to make on the concentrate. The deposit still needs a LOT more drilling to get any sort of funding. Deposit is good size, slightly bigger than HAS (although probably not after the next HAS update), but still smaller than PEK obviously. Bastnaesite crystals so the cost of running should be lower quartile in the industry, but once again I can't find any numbers. They plan initially 1kt p.a over 5 years delivered RE, though obviously will scale in. So the argument as I understand it is that they have lower CAPEX initially and will get a cash pile together to try and self fund the drilling required. Back of envelope though, I'm not sure how much cash that's actually going to be, has anyone done the numbers? Lets be generous and give a whopping margin of $60 per kg (I have my own estimates of what it will be), that's still only 60m USD a year.
Basically I rate PEK as the best ASX prospect but with a massive ? around SML that has to hit soon, then its a close call in my mind between HAS/VML. Cudos to the VML team though for actually recognising their competitors properly. Too many of the other companies compare themselves to companies that you wouldn't have even heard about/have a deposit that you can't monetise yet; and then show how good they are in comparison.
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