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Rare Element Resources Ltd. Message Board

  • aamizan aamizan Oct 21, 2010 1:26 AM Flag

    Byron Capital Research Report

    This report was run a few months ago.
    If you look at the comparable valuations though, the mine is valued at a NPV of $300 Million on its own based on the high concentration of Heavy Rare Earth Elements, use for which is about to explode due to the introduction of electric cars.
    Interesting that those valuations are based on market prices within China (unaltered by any export quotas), so much lower than they currently are in the rest of the world.
    If we calculate with real prices as of today, we are looking at a much higher valuation for the mine and therefore the company.
    This might still have some room to run. Although it might have run a lot already, I wouldn't bet on a correction anytime soon...

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    • great call dipstick, why don't ya head back to the Gaza Strip where ya came from amiz or azeez or whatever your rookie trader name is!


    • the mine has not been fully delineated yet, not enough drill results and depth to suggest that it will be "high concentration" throughout the mine.

      any prices REE will realise on its production won't be in play until 2015, at the earliest, and at which time a signficant amount of supply will have been added to the market from mines in Australia, Canada, South Africa, and Eastern Europe.

      If you read analyst reports across the space, the supply/demand situation is expected to remain tight for 2011 and 2012, and beyond that, the supply/demand will become balanced, and that's assuming GENEROUS growth rates in demand for things like electric cars and such.

      Calculating valuation with today's spot prices is negligence and shows inexperience in valuing an early-stage mining company.

      Byron's NPV calculations were reasonable, given that they know themselves that current spot prices are unsustainable, and arguably will lead to DECREASED demand for certain rare earth metals which may become substitutable.

      Nevertheless, we're well above Byron's own PT of $10.25 CDN ($10 USD), and they are a sell-side analyst with a bias due to investment banking relationship ongoing with REE.

      This has run a lot already, as you put it, although more room to run? no sir, there you are wrong.

      And yes, there will be a correction soon, beginning tommorrow.

      You should thank God that you were able to at least read my post, and hopefully, it helps you avoid losses by being suckered in to buying at these prices.

      But, if you wanna remain stubborn and obtuse, you'll ignore my input, and continue to believe in your thesis that a correction is not imminent, and then within a week or two, you'll have lost a signficant amount of profit or incurred more losses, by holding on here.


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