The rare earth market is difficult to invest in due to the...

The rare earth market is difficult to invest in due to the complexity of projects and frustratingly the opaque pricing assumptions used in studies.

I've been putting together some basic economic models since I came across the Sybella discovery in late September to gauge if it had any legs. Now with a large metallurgical data set out, I figure economic models can be more accurate and mine may be of use to other RDM holders in understanding how Sybella stacks up. I know it's poor form basing an investment case on peers, but given the state of rare earth projects and study input price assumptions ranging from $100 USD/kg Nd2O3 up to $250 USD/kg, it's a powerful tool in my opinion to cut through the BS.

Over time I plan on sharing a series of head to head comparisons for Sybella against large peers (those with engineering studies published), which hopefully others find useful, updating the RDM side as they develop the project.

First up, RDM Sybella vs IXR Makuutuu

I will let the numbers speak for themselves. The full table, basic economic models, comments by line and calculation of Makuutuu's DFS input pricing can be found here: RDM Sybella vs IXR Makuutuu.pdf. Happy to provide more detail or justification on any assumptions. Key data source for RDM cost assumptions (outside of RDM's data) is the Saturn Metals Apollo Hill PEA: https://saturnmetals.com.au/wp-content/uploads/2023/08/230807-Apollo-Hill-Preliminary-Economic-Assessment.pdf, a 10 mtpa gold heap leach with crushing-HPGR circuit, 300 km north of Kalgoorlie (middle of nowhere). I figure these costings are conservative as RDM should be cheaper to build, man and operate given proximity to Mt Isa compared to Apollo Hill.

I haven't allowed for much of the upside on the RDM side, which includes just mining the 20 m surface material (free dig, potentially no crushing, higher REE extractions, lower reagent consumptions), or any improvements in REE extraction with leach optimisation, or government assistance. So these numbers present a conservative case for RDM in my view. On the other hand, IXR Makuutuu has been in development since 2016 (including over 6 years of metallurgy by multiple labs) so presents as highly optimised in my view.

There are two key outcomes here:

1. IXR's Makuutuu has a much higher project EV currently of $99m, whilst RDM's Sybella has a project EV around one third, of $31m. Whilst Makuutuu is significantly more advanced (Reserves, DFS, Mining Licence), I believe these are heavily outweighed by the next point.

2. RDM's Sybella obliterates IXR's Makuutuu across all metrics other than development; location, IRR (152% vs 21%), NPV8 ($4b vs $169m), Payback (0.7 years vs 6 years) and EBITDA ($515m/a vs $42m/a) when using the same input REE price assumptions (for the record, I don't think a long term Nd2O3 price assumption of $200 USD/kg is realistic, so the Sybella economics at this price is just ridiculous here in my opinion).

I will let others come to their own conclusions on the value proposition for Sybella at $31m project EV against Makuutuu at $99m project EV.