Member Info for Catbert

Hi Kutzz, I'm not surprised- it is a feature with these explorers that they frequently disconnect price from underlying asset value.

The explanation is twofold;

1. The market for an explorer's shares is 99% PI but the ultimate buyer of the asset is a miner. Until the explorer has a proven mine -able project these shares have no value to a miner. Once they do their value increases meteorically. A miner can directly make a profit from a viable deposit a PI cannot. PIs tend to favour pending favorable RNS/ absence of fund raises and pricing relative to other explorers as their main price drivers. Until you have a mine you can't sell to a miner and really cash in. You can only sell to PIs who consist of long term holders and traders. Most exploration projects are a long way off from being a mine. Once it is 90% of the way there then the underlying asset might have some more sway on price.

2. Whales playing the mean reversion game. Most explorers have sell offs after RNS annoucements. Rick Rule is on youtube stating that one of his gambits with his holdings is to sell when he sees 75% buys and to buy when he sees 75% sells. On shares that trade in low volumes a Whale can move the prices easily and the fish will scatter quickly in their wake and exacerbate the price movement initiated by the whale. This is why a lot of selling happens on RNS announcements even where the announcement is good news. Good news can drive selling and thus negative price action.

I'm a holder of Landore which has recently had this issue with apparently irrational price action. A lot of the chat blames the market makers however I suspect they are innocent(ish) and that the price action is driven by PIs.

In the case of Landore an RNS which moved the resource from 1m oz to 1.5m oz took the share price from 26 in the run up to RNS up to 32 at the point of the RNS and then post RNS down to 24? Even though the underlying asset is now 50% bigger than before.

It's nuts, but I think this is just the nature of these stocks. Landore's share cap is now £27m. At the moment holders are quietly hoping that a sale is being discussed but at the same time we're bracing for the disappointment of further fund raises and more drilling. In truth no one knows what is happening (besides the board).

The reality is that these stocks are high risk and to hold them one needs a saintly level of patience although it helps a lot if you are also totally crazy to start with.

By the way I'm a small holder here. I like the management team and the projects have merit.

How soon will we all be rich?

I have absolutely no idea. Probably not but if you want to climb aboard the roller-coaster of emotions that is holding shares in mining explorers here is as good a place as any.

GLA DYOR

At a guess the pending podcast has nothing to do with a bid.

Whilst it is not impossible to rule out- if a bid has been made we'd have an RNS to announce it- indeed it would be something which the board could not rightly conceal from the shareholders.

More likely topics exist upon which a podcast might suitably comment.

1. How we manage the split on our metals between a strategy for Gold and a strategy for battery metals in order to maximize the economic utility of both assets and how does our organisational structure needs to be changed to suit this.

2. What our plans are beyond the summer. Do we have another fund raise/ are the warrants going to be paid up and if so what will the money be used for?

3. Bill's future as a Director. I'm not of the opinion that Bill's age has any impact on his capabilities and for many of us doing what we love is a good way of keeping ourselves young ... but at the same time he cannot go on for ever particularly if his role is to be one which is very full on and demanding. Is there a point where Bill takes on a slightly different role in the business? I think there is but of course only Bill himself will know when that might be.

Right now we do not have a date for any podcast. All we do have is an announcement that the podcast which was scheduled for the 24th February will now be pushed back to a later as yet unspecified date.

I can live with the BOD's ambivalence towards PIs but the absence of a date for any further commentary is starting to look a little more like contempt rather than ambivalence.

Hopefully they will confirm the date for the next announcement soon.

Outstanding Warrants:
1,229,705 20p 4th May 2022
19,887,249 20p 14th July 2022
Total Outstanding 21,816,954

These warrants which expire in May and July this year are a reasonable explanation as to how we fund going forwards, they are also a possible explanation for why we don't have big buyers of the stock.

The holders of these warrants are either in for the final push towards a sale or they're out. As it stands the warrants represent approximately 20% of the shares in issue.

Exactly mattja84.

The NI 43-101 is the marketing.

We hardly need a PEA either because the customers are miners and they already know how to get the stuff out of the ground.

The only unknown at this point is the unclassified gold resource which doesn't make the NI 43-101 as it's not strictly a resource.

To get a number on this we have the ground sampling and some drilling due at Felix. One of the proven trends is the correlation between drill results and ground sampling in the area so the ground testing is the current basis for expectations on an unclassified estimate. The map on the website shows clearly how much there is indicated by the ground sampling. It's a lot.

If the pins at Felix hit good depths and grades a very strong case for a significant amount of unclassified resource can be made and with a convincing degree of certainty.

If we are holding for assays of Felix this may take us into late April early to mid May however if we have buyers Geo's in the wheelhouse they'll already know before this date how much more gold we have as potential.

1- 1.5m oz of unclassified would not be a surprise if Felix follows the trends at Bam / Western Extension.

UR "the market" has apparently filled it's romper suit and spat it's dummy today.

No matter. The news is excellent. A continuation of the gold per drill meter rate is a great achievement.

Bam is now significantly extended. The theory about the Western extension is proven. Felix is about to be drilled and we have another 7km Westwards of hugely prospective untapped opportunities beckoning (old news I know).

Do we need to set and go again with another round of drilling or will the unclassified see us into the start of the sales process? My guess is the latter. Plus, if we still have 44 holes not included in that last MRE surely we have a little wiggle room.

All the indicators suggest that Junior Lake has 2m + oz of gold.

The price action this morning seems irrational.

Perhaps when North America wakes up they'll see a buying opportunity here.

This morning the company's underlying assets are worth 50% more than they were yesterday. What's not to like?

Interesting point on the topic of grades. The last drill campaign included extended drilling at depth where the grades were expected to improve (something pointed out in the last MRE).

It is not unreasonable to anticipate some overall improvement in average grade as a result of this depth drilling of BAM.

Thanks Olderandwiser.

I suspected my own calculations all along .

Havieron looks as though it will be running from 2023 to 2034 BAM has a 6.25 - 9.75 estimated mine life (my guess is that if we get drill hits deeper on the current footprint then we can expect our mine life to extend).

There is a big difference in grades too as you rightly indicate with Havieron averaging up over 3.5% and BAM at around 1%.

I'm not sure how to reconcile these but my guess is that they are reflected in the all in sustaining costs of each mine and partly in the Capex.

For ASIC Bam is $806 per oz and Havieron $621 per oz. In other words once in production Havieron produces gold at 77% of the cost that BAM does so maybe we could take our 8 bag estimate and x by 77% to correct for mine life and grade. Probably not the right method- more of a fast and dirty approximation.

Even adjusted for a lesser numbers on mine life and grades and based on the earlier assumption that were at 1.4m oz post MRE (and netting off our battery metals verses GGPs copper) and assuming relative market caps of £530m and £27m we look like a six bagger based on GGP's value 77% of an 8 bagger (my previous guess).

In terms of overall project value to a buyer the other factor besides AISC is the Capex to get the mine running in the first place, Havieron is $370m US and BAM is $93.81m (although this could be higher now) nonetheless there is a big gap although the deposit sizes are different however our Capex per ounce is lower. BAM = $67US Havieron $108US

So I wonder if we have some advantages as a project on the Capex side verses Havieron.

Our project is cheaper to get going because it's simpler and it hits a break-even faster.

GLA/ DYOR and don't trust my maths under any circumstances please.

Havieron has 3.4m oz of gold and a lot of copper. Market cap of £530m with 30% of the JV with Newcrest on Havieron plus some other wholly owned properties.

Newcrest already has infrastructure in the vicinity of this soon to being a productive mine. I guess price wise they are on the second up tick of the Lassonde curve and we're still on the first one or thereabouts (where do you think we are on this?).

Our deposit however is an Open Pit whilst Havieron is still mining their decline. Our deposit however has a much shorter timeline to production although we are yet to secure a buyer.

I guess the essence of the valuation question is valued by whom? A successful mining exploration company has most value to a miner because the miner has the capacity to generate revenues from the deposit. A PI doesn't.

Our shares are mostly held by PIs at present.

Hopefully with the pending MRE we're not far off being able to sell ourselves to the miners now.

GGP 3.4m / 530m us 1.4m / 27m? this makes us an 8 bagger on a gold only basis? Someone maybe check my maths?

I'm not sure what Havierons's 160kt of copper is valued at though verses our whatever amounts of battery metals or if it is reasonable to net these sums off against each other without invalidating the gold only price comparison with GGP.

DYOR/ GLA

Good question maestro1.

An announcement would have been good given that the plan was to drill Felix in the last drill campaign and this was unexpectedly put on hold. I guess we'll know the answer once the MRE comes out - which could be February.

I've been wondering about this question too.

Landore's Geos know what the cores are like when they pull them up because they will have checked them with handheld XRFs, indeed most assay labs will do the same check prior to the assay process just to make sure they are testing the right pieces of the core and to give them a baseline for expected results.

Presumably they used up their drilling budget on the 2021 campaign before they got to Felix (which is a hot target-but slightly more risky than BAM as it lies beyond a Fault). This was no accident. They made a decision based on the information they were getting during the drill campaign.

A few possibilities exist as to how why;

1. They found a lot more at depth in BAM and decided to continue downwards on a wider footprint.
2. They used the additional drilling chasing the Western extension.
3. They already drilled B4-7 at depth (where they expected it to continue).
4. A combination of 1+2.

Felix is a very hot prospect given the surface testing however BAM is an area they know more about in terms of the geometry, indeed they have a lot more data here so it is in some ways less risky drilling. In a run up to an MRE the obvious call is to drill where you have the greatest certainty to move the dial furthest on the MRE and this would be at BAM.

However if Felix is a continuation of the BAM lithology beyond the fault then it could be another BAM. Solely based on ground testing at Felix and the correlation of drilling and ground testing in the broader area it appears to be similar from what we know so far (as yet this correlation theory is untested at Felix although it is now seemingly proven in the Western Extension).

Until they drill it we wont know. My guess is that some or all of the warrants that were exercised in December may have been to fund drilling at Felix. I agree they need to expand the battery metal resource however if Felix is what it looks like from the surface testing then it's good news.

They can't sell Junior Lake without drilling Felix - we have to know and we'll have some indication as soon as we look at the first few drill cores (March).

If it is another BAM- then our boat comes in.

GLA DYOR TTFN

https://www.rareelementresources.com/disclaimers/industry-definition-relating-to-resource#.YeAAXv7P2Uk

Check the link for the various definitions of a resource under the NI 43-101 standard. In effect these are types of classification related to the degree of certainty pertaining to the resource. It is easy for us to be talking at cross purposes here if one party is talking implied resource and another inferred.

Bill is on record in the summer saying that we don't necessarily need to be at an MRE of 2M (indicated) for talks to begin with potential buyers provided that it looks like we can get there. Presumably there is a certain point where a potential buyer has enough information to make their decision.

It's a bit like the story of a military policeman who during the war who shot a cyclist for breaking the 8pm curfew.

His colleague asked him why he'd shot the man given that it was still ten to eight. The officer's reply?

"I know where he lives".

GLA.

This excerpt from the last MRE (pp88)

"Gold values have been plotted on the two grids by Cube, as shown in Figure 9-11. It is possible to link
together gold anomaly trends up to several hundred metres strike length. The soil data appears to
show that the main BAM Gold trend is extended 1.5 km to the west. There are also additional gold
anomalies continuing for 1.5km which may yet be proven to be connected after further soil sampling
and drilling. Multiple additional areas of interest have also been generated and may correlate to
additional gold horizons along the BAM trend and along the north-westerly trend within the Felix
grid. The gold ppb trends have been interpreted by Cube using Leapfrog software with contours
plotted, as illustrated in Figure 9-12. The strike trends are based on the VLF and MaxMin survey
anomaly trends."

My guess is this latest delay is more about including the proof of what was an untested theory at the time of last MRE.

As stated in the above excerpt from the last MRE above my reading is that Cube implied that BAM West could be extend for 1.5km (which doubles BAM). This latest result therefore is more significant than the drill results in and of themselves in that it potentially proves the theory relating to the Western extension posited by Cube in the last MRE.

I have no idea why the Felix drilling is delayed till March, however it could simply be down to the availability of crew and equipment or the fact that January is the coldest month of the year which means getting there/ living there (with the current infrastructure) and getting resupplied is huge health and safety challenge not mention a logistical nightmare.

This RNS is extremely good news. If we are in talks by March we'll also have the first few drill cores for Felix. Even though there will be a delay for assaying the cores at Felix the geologists will have already studied them with their magnifying glasses and handheld XRFs. At this stage we'll also know if the second part of Cube's theory holds true with regards to Felix.

GLA/ DYOR.

Another few weeks for the next major RNS on drilling results and resource estimates is neither here nor there in the grand scheme. One senses that Bill and Glenn are not so much ambivalent about the private investor but merely of the view that this group is ultimately best served by Landore finding and proving economically viable resources rather than by spending too much of their time and shareholders money on financial PR. The recent price action isn't indicative of anything other than thin trading volumes and an absence of significant news. It is already clear from this year's drilling that Bam extends significantly both East and West, furthermore Bill is on record in the summer saying that a clearly observable trend in the area is that the ground sampling correlates very closely with the drilling results. If this observation plays out, not only will Felix and the Western extension contain a significant amount of addition Gold, we might also have a viable silver resource and possibly copper too. For now, it's time for a catnap. Wake me up when the next RNS comes in. GLA and Merry Christmas.