Since you asked. BTW this is a snapshot of the current IXR concentrate revenue. Not to be confused with "basket price" which is typically an in-ground computation by assessing fractional values of elements pre-processing.
The calculation method remains unchanged over the years (long before most others actually knew how to estimate revenue) and continues to show very high correlation to the revenues stated by the companies themselves.
View attachment 4868050All figures in USD, using spot pricing from SMM.
Assumes 95% concentrate level for the MREC production and 75% payability
~$42.5/kg for the MREC
~Refined revenue value can be deduced by taking the 255M figure and dividing by the tonnes fore-casted as per calculation = 4000. 255M/4000 = $63.8usd/kg of refined REO from makuutu basket.
Acknowledging as always - this is only one side of the equation. Revenue which doesn't = profit margin.
To answer you question of tracking the price and therefore the spot revenue
Post #:
64141327 11/10/2022 value was ~$44usd/kg
Post #:
63583276 08/09/2022 value was ~$40usd/kg
Post #:
63185173 18/08/2022 value was ~$46.36usd/kg
Anyways don't take my word for it - company presentation basically validates that my calculation is +-5-10% and generally based on what date and where the pricing was sourced from.
View attachment 4868089The REO pricing is a fair way off Feb highs and is the primary driver for the overall sector pullback.
The hype in the market current for Rare Earths is any one finding any anomalous level of REO. If it's in clay it's marketed as ionic and the next IXR. If it's not in clay - they omit that data and compare the values to IXR anyways omitted explanation that the operational costs, processing, capital are vastly different.
Whilst following the spot price i find is somewhat value add as it tends to ebb and flow with the overall sector if you're looking IXR specific or any company it's also worth noting the projected pricing. A lot of lithium players got caught by entering the market at the wrong time and went bust.
So it's probably more interesting to view the 2025+ forecasting for pricing as this is what revenues the company expects to get whilst in production. Though i do still find it very valuable to look at the downside case as it's important to be the lower quartile for operational costs such that you can ride out the storm. Similar to PLS who were very close to going under but were fortunately bleeding slightly less money than A40/AJM etc etc.
The below was what was in the SS for pricing forecast via argus.
The forecasts are more likely what goes into the feasibility studies as a best guess scenario for revenues.
It's still worth knowing whether one would be profitable at todays prices, if not you then need to more heavily rely on macro factors for the company to be viable.
SF2TH
(20min delay)