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With your last sentence Charles you need to listen again. The analyst asked, PA explained why they won't, the economics are obvious.

With the rest I heard refreshing openess on the knowledge and skill that will be required with this. I do wonder what you would prefer instead from a CEO?

Little substantive evidence as yet. Analysts of actual numbers concluding Ne PM embeded tech is here to stay. This from Oct 21

"Outlook
With China's current dominance of rare-earth supply, they are likely to continue to use permanent magnet motors in a big way. In the EU, we are seeing some differentiation in motor designs in order to avoid rare-earths but in general, they are further converging on permanent magnet designs for their superior efficiency and power density. However, efforts are being made to decrease the utilization of magnetic materials and especially heavy rare-earths. Even with these decreases, IDTechEx expects the neodymium volume demand from battery-electric vehicles in 2032 to be 11 times the demand experienced in 2021."

https://www.idtechex.com/en/research-article/rare-earths-in-evs-problems-solutions-and-what-is-actually-happening/25071

See how it goes.

Morning Charles

I would say these efforts at diversifying away from PM motors is more about perceived future supply risk rather than present or future magnet price. The average EV has around 0.5 to 1kg of Nd used for its magnets. Even at $300/kg that is a very small cost input compared to EV compeating target sales prices of ~$30k per unit. Nd magnets have not been beaten for the savings they offer for a given power/range on the size of Li batteries required - the other and far larger critocal metal input cost.

Solve the Nd supply risk in the West and OEMs will keep with the present 90%+ adoption of Nd PM motors.

Actual take up of EVs is far exceeding even the highest predictions.

ATB.

The 'Dark Horse' is interesting but if viable then after 3 years and ferrite magnets so cheap why no commercial interest?

https://www.researchgate.net/publication/332699319_Ferrite-based_axial_flux_permanent_magnet_generator_for_wind_turbines

https://www.rivieramm.com/news-content-hub/news-content-hub/ferrite-based-generator-could-blow-away-established-wind-turbines-55214

Bit of an LCM??

"So how do you remove hundreds of tons from the mass of a machine made of magnets, gears, iron cores, and kilometers of copper winding? Exchange the magnets and maybe even the copper winding for coils of superconductors.

Simple, right? Actually, no. Years-long multinational research efforts have recently concluded that, while feasible, building such a turbine would be a monumental tech challenge. And the case for doing so is weakening as permanent magnets get better and cheaper. In fact, a dark-horse competitor whose technology is based on permanent magnets is on track to nudge superconductors aside in the 10-MW realm. And unless either the economics or the attributes of superconductors greatly improve—"
https://spectrum.ieee.org/the-troubled-quest-for-the-superconducting-wind-turbine

Lower cost = bigger = offshore = very low maintenance design. So excludes induction, gearboxes, cryogenics for superconductors. Many efforts made NeFeB magnets have no substitute.

Was mentioned in the webinar as an early further source of SE feedstock.

There are a few mines with significant resources

https://www.researchgate.net/figure/Estimate-of-Brazilian-Reserves_tbl1_266385236

Fund still buying > fund wants a low price > fund still has its 1ick5pitals working the boards.

Laughable now.

The BP had around $65/t for NdPrOx (22 x 12.5/4.5) so 40 is quite a reduction.

Looks like $500m is the total Capex as expected. Not yet saying what proportion of non bond 250m balance will be share issue.

70 to 80k/t CF over the LoM looks totally feasible here and every reason to expand beyond 4.5kt/y in time.

Is this webinar recorded and to be made available?

Yes that RNS left room for ambiguity imo, though 1mt of ore to me seemed a very low ask that just did not make a lot of sense.

Mind 1mt of Li2CO3 eq would be one big sized resourse. But perhaps this is what LRC are looking for - bigger proven Li better the prospect that gets developed through to a working producer...... and they get their royalty. It'll be a big step up from eg next door's approx 60kt Li JORCed there.

Still, pressure remains on:

https://tradingeconomics.com/commodity/lithium

ATB.

They may try but only a sticking plaster to try and meet demand ahead

https://news.metal.com/newscontent/101669714/scrap-recycling-likely-to-be-the-new-growth-engine-of-prnd-market-in-2021-2025

for NdOx and PrOx both now over $200/kg on the spot ask:

https://www.kitco.com/strategic-metals/

EV take up explosive

https://www.ecogeneration.com.au/global-ev-sales-set-to-smash-records-with-7-million-cars-in-2021-while-crossing-10-annual-threshold/

Something will have to give.

What a waste of time, there is no gap!!

Pre 16-30 closing trades Friday buys at 86.2, sells at 85.05, spread displayed at 83.6-86.2.

Opening today post 8-00, sells 85.2 to 85.42, buys 85.78 to 86.2, spread displayed 85.2 to 86.2. The bid/offer only started to rise from 8-07.

As is so often with this share the close and open UTs are all over the place and so pretty much meaningless

IMO.

ATB..

Ah. In looking for what was said in the AR re recrutment for build Longonjo, p23;

"Operational readiness
Significant recruitment is anticipated for the latter part of 2021 in preparation for project start up in 2022 and work commenced in preparation of standard operation procedures across the spectrum of operational readiness. "

and so it happens

and just past that for the long lead engineering packages is: "Sulphuric Acid Plant". That i had not spotted before.

No suphuric acid will be bought and imported it will be raw sulphur. one tonne of sulpher makes 3t of conc sulphuric acid in a sulphur burning plant, it is also far cheaper to ship. Sulphur goes at around $210/t today.

Re looking at the previous calc I see my school boy error in assumind a density of conc sulphuric acid of 1, it's 1.85. From that it's 28t of sulphuric acid to produce 1t of NdPrOx not 15t. That uses some 9t of sulphur. The Opex input cost for that for 4.5ky/y NdPrOx = 126kt H2SO4 = 42kt sulphur, cost $8.82m/y. Saving some $17m/y.

Capex for the plant looks to be ~$50m, so payback ~3y.

Looking at the Sprott RBW note it has p4 (tnx DP):

" Equivalent consumption for a hard rock concentrate processing facility is ~3 tonnes of acid per tonne of bastnaesite or monazite concentrate, roughly 2x the acid consumption intensity per tonne of REO product. "

Cofirming exactly my calc - once I got it right!

140t still remains unexplained.

FEED this week I reckon.

ATB.

Ah. OK, a very low hurdle then with the extensive area of claim and depth of clay shown.

Next door Big Sandy have got to 32.5mt at 1850ppm so far. I expect Bradda can bring it to that sort of JORCed level quite rapidly with the funding they have in hand. Big Sandy's lithium present revenue value with mine built and product sold is around $1.5bn. AZL Mcap AU$213m.

Tnx.

Li2O that is.

Indicated host ore at 1.0% Li2O3.

ATB.

Snow Lake has indicated with 100kt of Li2O. Bradda have just been given a first target at Wikieup/Burro to define 1mt of Li2CO3 (=400k Li2O). A target that must be doable - or why bother. A target 4x bigger.

Makes ya think.

GLHs.

Hi Charles.

If we ended up with double the issue we have now an sp of 250p would be an Mcap for PRE around $1.5bn. A year back I would have thought that was realistic, now however I'm thinking $3-5bn is a more likely value for this to go to. There are of course some provisos with that.

Pricipaly that they raise all they need for the build on this go and that the complete the build. But also that NdPr pricing stays up at around these levels. There are many pointers that it will and probably more.

Lithium is the 'Darling' in the press when we talk of decarbonisation and the meteoric rise of EV adoption, whereas Neodymium rarely gets a look in. But with EVs (and this is where nearly all new extra Lithium demand is arising from) every new EV sold also has (well 90%+ do) a NeFeB magnet motor. So the trajectory of Lithium demand has to be mirrored by a similar path for Nd.

Informative chart showing rise in China giga factory output at the end of this article:

https://www.argusmedia.com/en/news/2275094-china-unveils-plans-to-curb-excessive-battery-growth

China EV sales now around 1/5 of total car sales there;

https://www.forbes.com/sites/russellflannery/2021/11/13/ev-share-of-china-passenger-car-market-more-than-tripled-to-nearly-19-in-october/

Inevitable it will become more difficult to get NeOx or magnets ahead in the West.

Tony

what is known is that they want to move as fast as they can. First off FEED and a few minor bits of permitting. We know that. Then a cash raise so as to start the build at both sites. So how do they do that, how much from varied sources, in what order, how much of the total build need covered by this raising?

First off I think they will want to get all the funds required to complete the build without having to go to market again. Suceeding with that would be a huge project derisk. I think with their present valuation they can achive this but it may work better if they do it in quick succession stages with compleating the more difficult raise first ie the bond sale. That would be a large derisk for the project in its self so would do two things: raise the sp so making a following issue cheaper in no of new shares so less dilutive, but also be an easier raise re getting IIs on board from the derisk viewpoint.

That they already have a bond issue being progresses - as they say - is a far larger positive than I have seen with many other projects who have got to this stage. I am reminded of SXX who almost exactly 5y back raised over $1bn over a week on an Mcap of some $1.2bn. they had no simple bond issue, done with royalty first then new issue plus convertibles. Costs about 10%. But that only got about 1/4 of the total build need. Ambition can do alot... though for SHs they failed in the end. Firesale buyout 3y on.

Where this goes sp wise ahead very much depends on how they raise and in what order imo. Derisking balancing precariously against the negative impact that dilution will have.

Priced in? A guess. Sit it out? Yup.

ATB.

I see from resolutions 9 & 10 that they are setting up for the placing with an up tp 50% dilution but also to permit a rights issue covering an extra 10% on the raise. Seeking permissiom for a total of some 245m new shares.

This should be no surprise to anyone as they have stated the upper limit on the bond sale being $250m and the Business Plan has a $420m Capex estimate. I would anticipate the FEED will add some 20% to that to around $500m for full build out at both sites. So I would guess some $250m ~£185m will likely be raised from new issue. This may not be all in one hit as part may get delayed, eg issuing convetibles. Also other cash raising options that may reduce the size of new issue could include the likes of forward payment discounted offtakes or royalty deals for upfront cash. We'll see what they do.

But it looks as though it's all about to kick off soon enough. Forward selling going on?

The BP has Opex at $22/t total end to end priced against the Cerium reduced REO as it leaves Angola. 12.5kt/y of this will go to SE to make 4.5kt/y of seperated NdPrOx final product. So Opex for that is $61/t. With Europe pricing as it now is cashflow/earnings on that annual production looks to push above $500m/y.

PDYOR.