The FME board is remarkably quiet for something that is trading...

The FME board is remarkably quiet for something that is trading at 2x the raise price. In the hope of getting some discussion going I thought I would share some thoughts if anyone is out there.

The Panton Project and its life under Platinum Australia and Panoramic Resources has long being a riddle with the challenge being to extract value from this large high grade deposit. I believe the time is now ripe, given 4 key points, for the value in this deposit to finally be unlocked.

1. The Green Future. Everyone has head about lithium, cobalt, nickel, graphite and even uranium and hydrogen being touted as commodities to benefit from the move towards a green planet. Palladium and Platinum have very much flown under the radar of investors. Palladium and platinum are heavily used in hybrid electric cars as catalytic converters, converting toxic emissions into CO2, water and nitrogen. They are crucially important to hybrid vehicles due to the constant on/off of the petrol engine in these vehicles. Such is the extent of palladium used in hybrid electric cars that thefts of Toyota Prius catalytic converters have increased remarkably with the shooting palladium price.

2. Commodity Price and Supply. Pantons discovery and evaluation was done at a time of a depressed basket price for its commodities. Since then, and in particular in recent times the basket price has increased significantly.

Obviously the increased commodity prices bode well for the economics of the project however the more interesting aspect is the supply story of the commodities. The majority of the worlds palladium comes from South African and Russia and is a by-product of platinum and nickel mining. These 2 locales provide their own challengers with South Africa providing significant sovereign risk and major problems in powering industry, the Russian production comes from mines in the Arctic which pose significant climate challengers. With the production of palladium being a by-product there is little scope for targeted increases in the production of palladium as there is no magical on/off tap to ramp up palladium production. This has been shown with the palladium market being in supply deficit for the last 10 years.

3. Higher Concentrates. This in my opinion is THE game changer and flows into the last most important point. Previous metwork circa 2003 produced a 3PGE concentrate of roughly 21g/t. Recent ongoing work has focused on producing a higher concentrate through the use of a reagent with initial results producing a concentrate grade of over 200g/t.



4. No down stream processing. The significance of the higher concentrates is that the company will not need to build a plant to further refine concentrates. Previously with a concentrate of 21g/t it was not possible to toll treat the concentrate. Industry standard 4-5g/t per element toll treating cost (12-15g/t for the 3PGE mix) did not provide enough margin to feasibly toll treat the concentrate. Previous studies had to therefore incorporate further downstream processing, which greatly increased CAPEX and also operating costs. With the significantly higher concentrate the company can now look to toll treat the concentrate at an existing refinery with significant excess margins to be had.

The move to embrace this model is not a new one on the ASX. This is a model that was undertaken by Vital Metals (VML) on its acquisition of the Nechalancho Rare Earths project. The project was bought by Cheetah resources for $5m and was then later vended into VML. It likewise had an existing feasibility study on an advanced project that incorporated further capital intensive downstream processing. Likewise the project lay dormant for years. The new plan for the project was to scrap the downstream processing in favour of producing a high-grade REE concentrate and on sell this to refiners. That plan has played out extremely well for Vital Metals and breathed new life into the project. The project went into production in July this year. A different commodity but very much from the same playbook.