Hastings Rare Metals (ASX: HAS) has received a speculative buy recommendation and a A$0.30 12-month price target from a broker.
The following is an extract from the report.
Hastings Rare Metals Limited (ASX:HAS), (formerly Augustus Minerals Limited) is an Australian company, headquartered in Sydney, New South Wales, focused on the exploration, development and production of Heavy Rare Earth Oxides (HREO) from its world class Hastings deposit located in the North West of Western Australia.
The company has defined a JORC compliant resource at its Hastings project of 36.2 million tonnes (27.1mt indicated and 9.1mt inferred) grading 2,102ppm Total Rare Earth Oxides (TREO).
The Hastings project contains significant quantities of Dysprosium and Yttrium, both considered critical strategic materials by the US Department of Energy.
Hastings is one of the most advanced HREO deposits globally, with the company currently focused on validating previous metallurgical test work and optimising the product suite.
HAS also owns 60% of the Yangibana rare earths project located near Carnavon in Northwest WA.
We have initiated coverage of Hastings with a Speculative Buy recommendation and a 12-month price target of $0.30 per share.
- HAS has a JORC Resource of 36.2mt grading 2,100ppm TREO, containing 65,000 tonnes of HREO (85% ratio of HREO to TREO).
- The Hastings deposit is not a typical rare earth project with 85% of the contained rare earths classified as heavy rare earths (the highest ratio globally), considerably increasing the strategic value of the project.
- The deposit contains significant quantities of Dysprosium and Yttrium, two critical HREO required in the manufacture of hybrid cars, wind turbines and several clean energy technologies. Both are considered critical materials by the US Department of Energy, with supply shortages expected over the coming decade.
- Hastings is progressing with a Pre-Feasibility Study into the Hasting Project with completion forecast for March 2013.
- Hastings has the lowest market capitalisation of any company with a viable resource operating in the Heavy Rare Earths sector (that we are aware of).
- The Yangibana project, while valuable, is considered a secondary project and is not included in this report.
- Continuing restrictive export quotas of rare earths from China is expected to provide a price floor around current levels for HREO.
- We have initiated coverage of HAS with a Speculative Buy recommendation and a 12-month price target of $0.30 per share.
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