Trading at 0.15-0.25x NPV, fully permitted, Tier 1 location With...

Trading at 0.15-0.25x NPV, fully permitted, Tier 1 location With a ~$200m market cap, RXM is trading at ~0.15x our spot price pre-tax NPV8%, despite being fully permitted in a mining friendly location with compelling ESG credentials. Under our base case price forecasts, which are lower than spot, our pre-tax NPV8% is A$805m, suggesting RXM is trading at 0.25x that amount. The project’s economics are resilient to cost increases. Could Nittetsu bring in Japan Inc to assist funding? In April this year, The Japan Bank for International Cooperation (JBIC), in conjunction with some of Japan’s largest banks including Sumitomo Mitsui Banking Corporation, signed a US$355m loan agreement to develop the Nittetsu majority-owned Arqueros copper mine in Chile. The Arqueros mine has planned Cu production of ~15ktpa, compared to Hillside of ~42ktpa. Buy, NPV-derived target price of $1.01ps, 273% upside We expect a project sell-down in the order of 15-45% in the short term will assist RXM greatly in funding its share of project development equity. Solutions to close any remaining funding gap for RXM could include one or more of raising equity, off-take debt and equipment financing. To arrive at our NPV-based TP of $1.01ps, we assume a 30% project sell-down for $200m, and a $100m equity raise to solve for a funding shortfall.