Hi all. Just wanted to share my concerns and seek feedback on the importance of an NPV refresh to avoid the risk of a coordinated shorting attack. I thought it worth creating a new thread to try in my own small way to mitigate this risk. After the NAIF financing I've put a significant proportion of my portfolio into HAS and this is the one area in which I feel we are a tiny bit exposed.
My main concerns are:
* Latest published NPV is A$549m (previously A$A$466m)
* Market cap is approaching and I believe soon to exceed this value
* Shorters love this as an angle to instill fear with the easy line "pffft haww pffft hawww MC is bigger than their NPV "
* As per a separate post Ive made, the is a parallel current risk relating to the imminent expiry of HASO, and potential for big players to want them at near zero value
A prime example of this occurred with ADN which was taken from 40 cents quickly down to 18 cents with a similar line. Of course HAS is not ADN (and in my view the reduction in price for ADN was warranted), but their is still a risk of this happening if HAS do not publish a revised NPV figure very quickly.
For the record, the facts as I understand them are:
* NdPr oxide prices are rapidly approaching US$150/kg after being at around US$40/kg for close to a decade
* The old business case assumes something around a US$55-$60 long term average
* HAS has the best leverage to price of nearly all Rare Earth Metal plays, given the extremely high proportion of NdPr in our TREO (meaning our mining cost per tonne of final REE metal is very very low)
* If current prices continue for many years (probably unlikely but not impossible give the global factors at play) the NPV would be several A$ billion
* Most conservative analysts believe NdPr will continue at above US$70-$80/kg for many years, in which case our NPV is likely to be well above A$1 billion. There are well-respected analysts forecasting US$100/kg for foreseeable future
* HAS have announced a large than 30% increase in reserves, as well as major capex reductions, since the old NP figure was prepared
* HAS also holds a lot of cash
Twitter crowd can conveniently ignore all these facts though if they smell blood or get spooked.
If anyone from HAS leadership team is reading this, I really urge consideration of this risk (particularly so close to option conversion time which also presents others risks of market manipulation) and really hope you are close to releasing an updated NPV figure that is realistic but also not overly conservative. Also congratulations on NAIF financing and many thanks for your hard work. I have only heard the very best from people I know that have had business dealings with your team.
I reiterate this post is just intended to do my small part to mitigate risk rather than create it. I'm heavily invested in the success of HAS.
Just my thoughts and I welcome any challenges, corrections, disagreement etc
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