ngualla significantly derisked

OK, having read the announcement from the front page to Alistair's ridiculous tornado of a signature at the end, the prospectivity of the Ngualla project has been increased significantly by the newest batch of assay results.

The multi-commodity deposit that is the Ngualla project is becoming decreasingly reliant on the excellent LREO grades due to the expanding high grade zones of P2O5 and Nb-Ta. I see this as a significant de-risking as the project is decreasingly reliant on the price fluctuations of any single commodity.

There are some massive supplies of LREOs coming online over the next few years that will undoubtedly suppress the basket price for the Ngualla LREO. I believe this has deterred investors from allowing Ngualla a higher valuation to date. As the P2O5 and Nb-Ta grades and extents are improved, the risk of suppressed LREO prices are mitigated as the project gains a strong multi-commodity focus. The Nb-Ta mineralisation has only had minimal testing and is open in all directions and at depth, representing quite real upside from the current market capitalisation of $117m @ 82c (fully diluted with 142,899,233 FPOs and no outstanding options).

The very low levels of U and Th being encountered are also highly encouraging and will have significant benefits when it comes to planning an EIS and BFS for the project. I've wanted to invest in ARU for some time now but the U and Th content of the ore body have consistently seen me shy away from that investment.

Of course, my discussion is only a theoretical musing on the implications of a depressed basket price for LREOs, and event that may not occur (or at least not to any significant degree). The simple fact is Ngualla is starting to hedge that risk away and could support a massive NPV based on the non-RE commodities alone.

I want to list the grades they have encountered to date but have to go out for lunch, so I'll update them when I get back.

Tawny