"Is Rare Earth Minerals Plc actually worth 5.9p?"-Motley Fool, Tues, 4 Aug 20156 Sep 2019 21:31
"Is Rare Earth Minerals Plc actually worth 5.9p?" -Motley Fool, Tues 4 Aug 2015.
Quote:
"There*s no denying that REM plc has plenty of potential. Indeed, according to FIGURES already published by the co, the NET PRESENT VALUE [NPV] of all REM*s interest in Fleur El-Sauz, Ventana, Yangibana & Western Lithium amounts to £800m. As REM*s mkt cap is only £70m at present, based on NPV value, REM looks to be significantly under-valued."
"However, REM has a LONG WAY TO GO before it can UNLOCK any of those mines. It could be years before the mining minnow is able to start producing lithium from any of its prospects.."
"RISK/Reward- On one hand, if the co reaches it GOAL of COMMENCING PRODUCTION from lithium owned assets, REM could UNLOCK £800m in VALUE."
"On the other hand, there*s a serious possibility that REM could struggle to achieve this goal....while Fleur El-Sauz is forecast to have some of the LOWEST COST in the industry, UNCERTAINTIES such as interest rates, inflation rates and VOLATILE LITHIUM could render existing forecast useless."
"Overall, it really is difficult to tell if REM will go to ZERO or BECOME ONE OF the World*s largest mining co*s."
"If you take NPV of REM*s lithium projects and cut in half to BUILD a MARGIN OF SAFETY into THE N U M B E R S, REM*s share of the mines could be worth £400m- around 5.9p per share."
"But only YOU can decide if REM is suitable for your portfolio. If YOU decide you want to take a position, it should be PART of a WELL-DIVERSIFIED portfolio to MINIMISE RISK."
Link: https://www.fool.co.uk/investing/2015/08/04/is-rare-earth-minerals-actually-worth-5-9p/-
Comment:
Why am I posting a 2015 article about REM plc? REM plc became Cadence Minerals Plc after the Founder left etc and renamed.
I was asked - how is the rules about maths? Well, Motley Fool stated: "NUMBERS." Clarett stated: "Accounting" etc.
REM plc was NOT EARNING enhancing so it was on potential. Hence, why the Sonora project was critical especially if REM were to have been successful in taking Bacanora over for Sonora as it is now known that it is the world No 1 mine per jmb2*s link. I have also quoted it with attribution. We also now now that Yangibana is NO 3 in Australian rare earth with Lynas as No 1.
Motley Fool used the NPV from all the other projects that REM plc was involved in in their cals of "POTENTIAL."
If a co has actual earning, then it is EPS, P/E, trailing P/E, EBITDA etc and the rest of the metrics. Hence, for the KDNC Amapa project, I use P/E, EBITDA, Revenue etc etc rather than NPV personally. This KDNC gave - the basic figures for Amapa via their RNS of 30 Aug 2019.
So, if anyone read the above article, they would have been aware that it is not suitable to throw the farm or large sums in as there is a RISK WARNING given at the end of the article.
Motley Fool states clearly the RISKS - read the article about not get the fund if the market does not fund and the mention of "vol
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