Listening to positive the Money of Mine chat about Red Metal and...

Listening to positive the Money of Mine chat about Red Metal and the Sybella project got me inspired to revisit my financial models and sharpen up some of the assumptions off the back of the Phase 2 testwork and commentary from Rob around potential for a >20 mtpa throughput.

I have assumed a pH 3 leaching scenario is favoured following further testwork, which Geovest Insights appears to agree with. RDM haven't achieved terminal extraction with pH 3 but based on their pH 2 leach data I have assumed terminal extractions of 60% Nd, 60% Pr, 35% Tb and 30% Dy are achieved at pH 3. There is significant upside from this if they get closer to the pH 1 results with sufficient time (80% Nd/Pr, 50% Tb/Dy), but I think these pH 3 assumptions are about right for now.

I also refined the mining cost assumption based on 1. higher mining throughput (lowers unit costs) 2. soft/very soft ore characterisation (reduces blasting) and 3. rippable to 15 m (costs will approach clay mining of A$3/t where rippable). DEG's DFS uses a unit mining cost of A$3.60/t with contract mining for comparison.

I refined the reagent OPEX based on acid consumption from the pH 3 testwork and an assumption around the neutralising reagent costs required. The A$4/t ore for reagents compares fairly against IXR of A$6.20/t ore using pH 2 and a much higher acid consumption in testwork of 14 kg/t ore.

Finally, the CAPEX for the 20 mtpa case was scaled from Apollo Hill's 10 mtpa heap leach 2023 scoping study using a power 0.8. Mining projects are typically scaled with throughput at power 0.6-0.8, I have used the higher end at 0.8 to be conservative on CAPEX scaling.

Below are two scenarios, pre and post-tax. In the model I have used NdPr of US$110/kg which aligns with the DFS produced by ARU, HAS, ASM and ILU to allow comparison with Australian peers. Scenario modelling for post-tax financial outputs across a range of NdPr assumed prices are also provided in the below charts to understand project sensitivity. The economic model and notes can be found here: RDM Sybella Economic Model 20mtpa 300624.pdf



Because the rare earth market is a bit of a mess, I have elected to rather compare this project against established Australian peers as opposed to outright assess it at a specific rare earth price. All of these peers have project valuations many multiples of Sybella, and as such this presents an opportunity for Sybella to rerate as it proves up against local peers (particularly when Twiggy and Gina take notice!).

Current project EVs:


Comparison of project post-tax IRR:
Comparison of project post-tax NPV8:


Disclaimer: the above is basic economic modelling and does not stand against a DFS as produced by ILU, ARU, HAS and ASM. We will have to wait for RDM to produce a scoping study to formally assess the economics of Sybella.