PM8 Peer comparison - Other REE projects analysis, page-842

For those interested I've gone ahead and taken a look at a whole host of rare earth projects basket prices based on the China F.o.B. Export prices 8-10-2019 as per Hastings investor presentation on 02/02/2019 as per Asian Metal average 90 days market price of RE oxides.

For most resource I was able to find Gd, Yt, and Th values which were separated and not combined. Funnily enough for Hastings I was not able to. Therefore $0 has been applied to all of the following basket prices for Gd, Yt, and Th (as I'm sticking to the pricing provided specifically by Hastings.

Hastings and Sichuan as per their presentation:



Note: My numbers differ slightly from Hastings own numbers for Mt Weld, Mountain Pass, and Baotau (Bayan Obo) as my source of basket weightings differs. In all cases the basket prices I've calculated exceed those performed by Hastings by several $.











Of course basket prices don't tell the whole story. They are a good indicator of basket value but as we all would have seen within the PFS, Longonjo PFS 'base case' assumes an NdPr price of $80,000t. Current prices are around $45,000t. That is a 75% increase which Pensana has forecasted into the Longonjo PFS. The concentrate pricing for the base case is $3821/t. This means that the current value of Pensanas concentrate is roughly $2184/t. But keep in mind the above number of $3821 for a 35% concentrate. IF hypothetically Pensana could create a 100% concentrate, (100/35) * $3821 should then equal the Longonjo basket price per kg $24.28 * 1000, which is $24280. However it equals $10917. As you can see (even if you included several thousand dollars to make up for any rough rounding errors I may have made), the sale price does not equal the basket price and does not even get close. But the basket price is still a good initial indicator of value within a resource and of course, those with a more valuable basket price will have a more valuable final concentrate.

The above is why in my opinion from my time researching is that recovery > grade > basket price. As we can see, for hard rock light rare earth resources Longonjo is up there with the best in terms of the basket price. In fact Mountain Pass is currently producing a concentrate as we speak and has a basket price half of Longonjo. That is staggering. However it just goes to show that cheap mining but also high grade is vital.

Mountain Pass have a resource grading roughly 6.5%. So whilst their basket price is half of Longonjo, their grade is double what Pensana expect to be mining for the life of mine.

A similar conclusion can be made when comparing Longonjo with Bayan Obo (6% - 8% REO grade).

The Longonjo resource is definitely big enough and grade is good enough. 4km to a major railway and mining from surface you literally can't get much better and such strong local govt support. For Longonjo to become the next Mountain Pass or Mount Weld the key will be recovery IMO. It's cheap enough to build and cheap enough to mine, if we can recover more of what we are actually mining then we will be the next producer IMO. No cracking, no leaching, no harmful acids, minimal environmental impact built into PFS.

@setfire2thehive you may find the above table on Ion Adsorption useful in your threads.

All IMO.