Sign up Australia
Proactive Investors - Run By Investors For Investors

Greenland Minerals and Energy receives a Speculative Buy from RM Research

The target price is more than three times above the last traded price.
Greenland Minerals and Energy receives a Speculative Buy from RM Research
RM Research has applied a Speculative Buy

Greenland Minerals and Energy (ASX:GGG) has been rated a Speculative Buy with a target of $0.29 per share by Perth-based RM Research.

The target provides for potential strong upside due to being three times above the last traded price.

The following is an extract from the report "Technical review commences...minor metals demand improves."


Shenghe placement, board appointments

Following the placement of A$4.6 million (late 2016), Shenghe Resources Holding Ltd now holds 12.5% of GGG and Ms Wenting Chen has been appointed as a non-executive director.

Ms Chen has degrees in law, economics and business and has considerable international experience covering mining, banking and financial markets.


Technical review in full swing

Further to our early report (29/11/17) Shenghe and the Company are now working on a technical review involving the optimisation of concentrate grade and recovery through their relationship with state owned rare earth specialists Multipurpose Utilisation of Mineral Resources (“IMUMR”).

In addition, the technical committee will examine potential flow-sheet improvements through the refinery. The review will also investigate the recovery of additional products (e.g. lithium, zirconium) from Kvanefjeld.

The technical review will be conducted in parallel with the mining license application and should lead to significant CAPEX+/-OPEX savings and improved project economics.


Kvanefjeld a platform for Shenghe’s vertically integrated rare earth expansion

Shenghe (market capitalisation A$3.0 billion) is based in Chengdu (Sichuan Province, China) and has expertise in mining, beneficiation, metallurgy, separation and downstream processing and marketing.

Shenghe has its own downstream processing facilities (including a plant in Vietnam) with access to cheap reagents.

Shenghe established Sheng Kang Ning Mining Investment in 2013 as their rare earth and precious metal investment vehicle and Shenghe Resources (Singapore) Pte Ltd as their trading arm in 2015.

RMR consider this is a clear sign of Shenghe’s desire to use Kvanefjeld as a platform to expand their rare earth business interests.


Permitting

A draft Environmental Impact Assessment (EIA) was submitted (late 2015) and is currently being updated following comments by the Greenland Government.

The Social Impact Assessment (SIA) is also due to be submitted with over 90% of comments/suggestions having been addressed.

The Public Consultation Phase will followed acceptance of the EIA and SIA.

Highly experienced consulting firm Shared Resources (ASX Announcement 20/4/2017) has also been appointed to assist with the SIA and EIA.


Price Catalysts

Results of the technical review together with progress on permitting at Kvanefjeld are near term drivers.

We note the recent Chinese policies relating to tighter controls over rare earth production, processing and supply and “strategic” recognition of rare earths which are likely to put further upside pressure on REE prices with Nd, Pr, Tb, LA and Ce already up 10-15% since January 2017.


Action and Recommendation

RMR is maintaining its speculative buy on the back of our risked mid case NAV of A$0.29 based on conservative CHREO and U prices and assuming a 40% free carried interest.





Register here to be notified of future GGG Company articles
View full GGG profile View Profile

Greenland Minerals and Energy Ltd Timeline

Related Articles

Iodine plant
September 15 2017
Shares in the AIM-listed group soared 20% higher on Tuesday after it said the new IO#7 plant will be based around its existing IO#3 operations in Oklahoma - hitherto Iofina’s highest cost per kilo plant
oil and gas operations
August 22 2017
The area being targeted by Rose is believed to have very significant potential – Paradox could contain as much as 1.1bn barrels of oil and 2.2tn cubic feet of gas.
UtilityMeter.jpg
November 25 2016
During its last fiscal year, OPG generated a record 3.2 billion units of electricity.

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2017

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use