DRE vs Lassonde, page-11

Now now, play the ball not the man. My motives really don't matter, it's the content of my posts you all want to consider. I'm motivated to research this emerging new RE field for various reasons and happy to share for other varuious reasons. Don't judge a person until yiou walked a mile in their shoes. Happy to make big calls, take on all knockers and set myself up for failure if I'm wrong... like Mike Jordan says about the joy of gambling, whatever makes you uncomfortable.

Fact is, I done a pile of work on Yangibana to leverage across the district, and it backs up my initial gut feeling with DRE. Put me on ignore if long posts aren't your thing because thats how I write. First thing RE investors in this area should understand is that NdPr is >90% and heading to 95% of the basket value most other REOs become over-produced in the chase for NdPr. Laser focus on the NdPr %, that's the money and that will quickly seperate economic from not. HAS has half a dozen signifcant deposits in the mine Reserve, with NdPr:TREO ratios 25% up to 50%, averaging 36-37% in the LOM average. So within the major ironstone lode alteration ring surrounding the central C1-6 carbonatites we know NdPr deportment into monazite is variable between 'deposits' but similar within deposits.

The importance of higher NdPr:TREO ratio (%), is obviously that more NdPr is present for any given TREO% grade. Deposit grade is also variable, though a lot depends on the reporting grade lower cut as to what gets reported. HAS has steadily increased tonnes and reduced grade of their Mine Reserve over time, more so by chasing larger but lower grade mining blocks than from bringing in new low grade ore. There is certainly some minimum NdPr% goal-seeking involved, maximising ore:waste pit ratios while keeping NdPr grade high enough to make bank. The outcome is all their deposit Mine Reserves now cluster fairly tightly around 34% NdPr despite the large variattion in NdPr:TREO ratio and TREO grades. Frasers and Simons Find being outliers. Lets take it as given engineers working for HAS aren't stupid and designed the most economic pits around these ironstone/carbonatite lodes all things considered.



I've posted some spreadsheets on HAS demonstrating that a 17 year, 21Mt @ 0.33% NdPr mine is marginal regards being funded at $112/kg NdPr (approx spot early Feb). Check if you like, but you can also take as given margins are highly sensitive to NdPr% grade. Drop the above HAS NdPr from 33% to 30% and NPV*% pre-tax falls from $250M to negative on the spreasdsheet at US$112/kg. From $500M to $250m at $125/kg and so on. On an average annual operating cashflow only basis, the mine needs >22% NdPr @ $125/kg for EBITDA > 10% of annual revenue. If a mine is planning to run <10% margin, it's one hick-up or price fall away from closing down...

Apologies for the long, technical drivel, but investors in this RE district should understand the basics of what is economic and what results mean. It means that DRE needs an average of ~34% NdPr in large tonnes just to play. It means lower NdPr% deposits require proportionally higher TREO head grades to make bank. Below is a table summarising what TREO and NdPr:TREO ratios produce what NdPr% grades. If your wondering why KFM copped a flogging the other day, it's probbly because the penny driopped that the Chalba Shear area west of Mangaroon is consistently returning 18% avg NdPr. They will need an average TREO% around 1.8% average just to reach the 0.33% NdPr minimum hurdle.

C3, Sabre, Yin and a potential DRE blend gives you an idea of what TREO% drilling assays to look out for. C3 would have a lower strip ratio so lower mining costs, but it's odds on to have poorer recoveries, especially in oxide. This is the basis of disappointment with C1-5 results released to date... being 22% NdPr grades are miles away from what's required. Sabre is a big step down from Yin, time will tell if the Mangaroon side is on average a big step down from Yangibana to the east. No rule saying both sides will be siilarly endowed with ironstone lodes or moanzite NdPr%.

How did MRQ work out for you @Swingsnroundabouts... I warned holders at 2.7c and other than pumps and dumps it's back to 0.3c where it belongs. Did I mention as well as sharing with HC, I hate to be wrong?

GLTAH, you're welcome.