Far East Capital Newsletter

The latest commentary from Warick.........................................

"Lindian Resources (LIN) reported a mighty intercept of 854m at 2.73% TREO (down hole), from a depth of 52m. Additionally, it completed a $35m placement that enabled the payment of the third instalment of US$10m towards the purchase of the Kangankunde Project. It now owns 67% and has to pay only another US$10m, by July 2026, to secure the remaining 33% of the project. Just last Thursday, Lindian announced a maiden Inferred mineral resource of 261 Mt at 2.19% TREO. The Company describes it as an “outstanding outcome” achieved in about 10 months, with 14,000m of drilling.

While this is a substantial resource, the license will undoubtably hold more than twice this tonnage. The grade is good, but any mine plan will involve a range of domains and grades such that higher grades may be mined in the early stages. Having a maiden resource is an important step along the road and a door opener to the commencement of off-take negotiations. We continue to believe that Lindian could develop into a powerhouse rare earth company in the future.

The market capitalisation of circa $408m (pre placement) should be compared with that of Lynas Rare Earths Limited, which is currently $6.5bn. That is what can be achieved with a world class deposit, once it is in production. Whether or not Lindian lasts long enough to reach this size depends upon how appetising it is to leading companies that want a meaningful size project upon which to build a new rare earths division. Think of BHP and RIO as potential suitors. Then again, Fortescue could be in the game as well. There is something appealing about a > 50 year mine life for these companies. "

He keeps on suggesting about potential suiters for Lindian.

I will be happy for the injection of funds but not entertain any takeover offer unless its in the $1-$2 range. Thats its future potential. Heard rumors about Fortescue's interest before. BUT is it a fact?