Goschen DFS and financials, page-13

Thanks petere for sharing your estimates, though I'm surprised VHM were permitted to IPO on the ASX without disclosing the full Goschen DFS as part of the prospectus.

I would think that the detailed information contained, particularly the financial analysis metrecies such as NPV, IRR etc. would be highly material for potential new investors to ascertain a reasonable valuation for the company and benchmark it against potential competitors, when obviously company insiders would have had access to the full DFS details. My concern as a potential investor is that the reason the financials were not revealed was that they didn't look very good!

So as there is no financial analysis of the Goschen project publically available how best can investors come to a reasoned valuation?

A quick compero of VHM’s Goschen project with ATR’s Donald project shows they are quite similar, in that they are both massive WIM style HMS deposits with relatively high RE mineral concentrations in a common jurisdiction with similar technical issues; relatively low grades of very fine grain materials with high slimes (<20um) in comparison to strandline HMS deposits, so the financial viability of developing these deposits is still open to question. Attached is a summary of my comparison of the two projects; beware, it contains my estimates based on the publicly available JORC data and will not necessarily concur with company figures and I hold ATR…so please DYOR!

VHM Goschen v ATR Donald compero

VHM Goschen

Areas 1,2,3 & 4

ATR Donald

RL2002

Total Resource

HM mt

629

HM mt

1,810

HM mt

HM%

2.9%

18.4

4.6%

83.3

Cutoff grade%

1.0%

1.0%

Reserves

Proven

24.5

1.32

310

16.74

Probable

174.2

6.10

292

11.97

Resources

Measured

30.7

1.76

579

26.63

Indicated mt

310

9.90

564

25.94

Inferred mt

288

6.67

667

30.68

Undersized/slimes %

18.0%

16.0%

Oversized %

3.0%

9.0%

Strip Ratio

2.65:1

Dry mining

2.2:1

Dry mining

Mineral assemblage

VHM %

66%

In situ M tonnes

78%

In situ M tonnes

Zircon

20.2%

3.71

18.0%

14.99

Titanium minerals

Ti02%

Ilmenite

24.1%

4.42

30.0%

24.98

Leucoxine

8.2%

1.51

19.0%

15.82

Rutile

9.6%

1.76

8.0%

6.66

Monazite

3.30%

0.61

1.90%

1.58

Xenotime

0.60%

0.11

0.60%

0.50

The obvious difference is the total JORC’d resources, Donald at 1810 Mt is almost 3 times the size of Goschen at 629 Mt and the HM grade of 4.6% is +50% Groschen at 2.9% , which results in Donald having +4.5x the HM resource at 83.3Mt v. 18.4 Mt for Groshen, however Groschen has materially higher grades of RE minerals with the total monazite + xenotime grade of 3.9% of HM v. 2.08 for Donald. Both projects are now being promoted as RE projects with VHM by-products, perhaps in order to avoid the fate of Kalbar’s Fingerboards project in Gippsland at the hands of the Andrew’s government.

Another major factor IMO is that the core of the Donald project is an existing mining lease (MIN5532) which has a JORC’d resource of 454Mt at 4.4% HM, and is therefore further down the development pipeline.

Based on the above you would reasonably expect the Donald project, and therefore ATR, would have a higher market valuation than Groschen/VHM, but when you look valuations based on the recent capital raises it is not the case; ATR raised A$5.9m (predominantly from directors) @ 54c in November 22 to value the company at A$67m, whereas the VHM IPO raised A$30m @ $1.35 to value the company at A$266m!…and this is not taking into account ATR’s long established PRC based titanium chemical processing and distribution business.

So to summarize, based on the above comparison method there is a large discrepancy in the valuations of VHM and ATR, and whether one or the other is overvalued or undervalued is in the eye of the beholder…GLTAH & DYOR etc!