logo-loader
viewGreenland Minerals Ltd

Greenland Minerals continues to improve Kvanefjeld’s cost position: Pitt Street Research

Potential supply disruptions resulting from a US-China trade war and the completion of permitting in Greenland can help re-rate the stock.

Greenland Minerals Ltd - Greenland Minerals continues to improve Kvanefjeld’s cost position: Pitt Street Research
Pitt Street has valued Greenland Minerals at 44 cents per share (base case)

Greenland Minerals and Energy Limited’s (ASX:GGG) Kvanefjeld project holds the world’s largest undeveloped rare earths deposit.

Recently completed optimisation studies have firmed up what is, by rare earth industry standards, a remarkably simple process flow sheet and a highly competitive cost structure.

Pitt Street Research has valued Greenland Minerals at 44 cents per share base case and 74 cents per share optimistic case using a DCF approach with conservative assumptions on rare earth prices.

Following is an extract from Pitt Street’s research note revisiting its February 5, 2019 update report:

Greenland Minerals and its collaborators have progressively driven down the estimated project cost base since completion of Kvanefjeld’s initial feasibility study in 2015.

The most recent feasibility study in July 2019 highlights further improvements to project metrics.

The project’s capital cost estimate (US$505m) has been reduced by a further ~40% from the US$832m reported in 2016’s update of the initial feasibility study.

Investment case

The Kvanefjeld project, which we believe can potentially start production in 2022, is particularly valuable because of its duration, its scale, its favourable metallurgy and the fact that its critical rare earth production profile mirrors long term demand forecasts.

A steady increase in rare earth and U3O8 prices, potential supply disruptions resulting from a US-China trade war and the completion of permitting in Greenland can help re-rate the stock.

New valuation range A$0.44-A$0.74 per share

Using the new estimates from the July 2019 update, and the recent $7m equity raising, we now value Greenland Minerals at 44 cents per share base case and 74 cents per share optimistic case using a DCF approach with conservative assumptions on rare earth prices.

Quick facts: Greenland Minerals Ltd

Price: 0.115 AUD

ASX:GGG
Market: ASX
Market Cap: $136.96 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Greenland Minerals Ltd named herein, including the promotion by the Company of Greenland Minerals Ltd in any Content on the Site, the Company...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

PolarX encounters encouraging results in drilling at Alaska Range project

PolarX Ltd (ASX:PXX) managing director Frazer Tabeart updates Proactive on first drilling results from the Mars and Saturn prospects in the Alaska Range project in Alaska. The drilling at Mars intersected porphyry-style veins containing visible copper and molybdenum sulphides. Tabeart said...

14 hours, 16 minutes ago

2 min read