MEI - Meteoric Resources

[Sean K]

This turkey just keeps gobbling. As above, supposed to be one of the best rare earth projects in the world, but it doesn't look like anyone believes it. Rick Rule must be taking a bath on this.

 

[Knobby22]

From Bell - who have a speculative buy. 40c valuation.

China Northern (60011.CN, not rated) accounts for ~70% of Chinese rare earth mining capacity (60% of global capacity) and we suspect, operates in the bottom quartile of the cost curve. Quarterly earnings indicate that the business is operating close to break-even at current NdPr price levels, providing support for the argument that we have hit a floor in pricing. Whilst it may take some time to work through, we see a strong case for higher NdPr prices in the future. When exactly, is the difficult part to answer.

The other problem is the timelines. And will there be good partnerships? And is there Australian alternatives also to hit the market?
It's just a bit too scary for everyone I think. It does look cheap though.

 

[Sean K]

From Bell - who have a speculative buy. 40c valuation.

China Northern (60011.CN, not rated) accounts for ~70% of Chinese rare earth mining capacity (60% of global capacity) and we suspect, operates in the bottom quartile of the cost curve. Quarterly earnings indicate that the business is operating close to break-even at current NdPr price levels, providing support for the argument that we have hit a floor in pricing. Whilst it may take some time to work through, we see a strong case for higher NdPr prices in the future. When exactly, is the difficult part to answer.

The other problem is the timelines. And will there be good partnerships? And is there Australian alternatives also to hit the market?
It's just a bit too scary for everyone I think. It does look cheap though.

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I suspected it was NdPr price. China might even be crapping on it to stop development from anywhere but China for geostrategic reasons. They'd happy run at a loss to stop non-reliance on their rare earths.

Makes me wonder how MEI gets financed, if NdPr is suppressed.

Their D&D presentation had an NPV of US$1.235m, but that must have been on old pricing.

 

[Sean K]

Their funding options:

 

[Sean K]

Still watching this flea bag. Across 9c starting to look like there's no more sellers. But, not many buyers either.

Must do a share consolidation soon. A 9c company with a MC of $200m is mad.

There must be an issue with TREO prices at the moment. I suspect China keeping the market down for ecogeostrategic reasons. I wonder what happens when we cut them out of the supply chain. The West is going to have to get NdPr from somewhere.

The largest and highest grade TREO deposit in the world and it's looking like a dog.

 

[peter2]

As you know, it's not the quality of the resource that counts. It's the ability to borrow billions to develop the project.

 

[Sean K]

As you know, it's not the quality of the resource that counts. It's the ability to borrow billions to develop the project.

Yep, US$400m + from somewhere. Doubt they mine it themselves. I'm not sure if any of the big enough players are going in for TREOs. Maybe a Rare Earth play like LYC or ILU could partner with them.

 

[finicky]

Maybe a Rare Earth play like LYC or ILU could partner with them.

@Sean K bug off, I'm reserving ILU's jv capacity for Red Metal's Sybella REO discovery.

 

[Sean K]

Still trying to work this one out and what factors are at play to keep it in the toilet. Can only just be the Nd & PR price and risk in getting the Capex. Adding in this satellite deposit seems to have materially affected the production profile, but it was already a very long life and high grade project. Maybe it will take China being cut our of world RE supply for some reason that this gets more attention.

Across 9c still looking bottomish.

 

[Sean K]

I'm pretty sure that might be a bottom down there, but I've said that before and had my arse handed to me. A bit of a fence across 11.5c.

Watching the interview with the Chairman from 5 months ago gives me a better understanding of it, but it's still well outside my area of 'expertise', interest or understanding. But, that's not hard. Lots of talk about how China are fixing the market. I might take a bet that the West is going to be running for these materials after China try to take Taiwan by force.

I think it's now in the orphan stage of the Lassonde so it might take some time to climb up the last curve into development and production high. A lot of work to be done in getting finance or a JV partner to fund it.