© Greenfields Research Ltd
© Greenfields Research Ltd
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© Greenfields Research Ltd
© Greenfields Research Ltd
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Au
g 2
007
De
c 2
00
7
Ap
r 200
8
Au
g 2
008
Dec
2008
Ap
r 200
9
Au
g 2
009
Dec
2009
Ap
r 201
0
Au
g 2
010
Dec
2010
Ap
r 201
1
Au
g 2
011
De
c 2
01
1
Ap
r 201
2
Au
g 2
012
Dec
2012
Ap
r 201
3
Au
g 2
013
Metal Pages La Oxide 99% min FOB China (CN) / tonne
© Greenfields Research Ltd
0 2 4 6 8
Mt Weld
Dubbo
Nolans
Delay (years)
0
5
10
15
Fre
qu
en
cy
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
“Getting your ducks in a row” – all appears in order
(compliance)
Legs madly working away below the surface
(strategy)
© Greenfields Research Ltd
© Greenfields Research Ltd
“Taking a Risk
for Rare Earths”
New York Times, Keith Bradsher,
8th Mar 2011
“The Fear of a
Toxic Rerun”
New York Times, Keith Bradsher,
29th Jun 2011
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
0.000
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
To
tal R
are
Ea
rth
Ox
ide
Gra
de
(%
)
Advanced light rare earth deposits
Early stage light rare earth deposits Most advanced rare earth
projects are the highest
grade – early mover
advantage
© Greenfields Research Ltd
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•
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•
•
•
•
Examples: Molycorp, Lynas
© Greenfields Research Ltd
© Greenfields Research Ltd
Ma
rket
Gro
wth
(re
qu
irin
g in
ve
stm
en
t)
DOGS/PETS Not profitable. Usually
“pet projects” that
provide a non-financial
benefit i.e. synergies,
labour retention etc
CASH COWS High market share in
slow growth industry –
“milked” to fund other
investments
STARS Leading
assets/products
dominating fast
growing markets, still
requiring investment.
QUESTIONS Also known as
“problem children”.
High growth sector but
large capital investment
required.
Market Share (beating the competition)
© Greenfields Research Ltd
Market Share (beating the competition)
Ma
rket
Gro
wth
(a
dd
ing
to
th
e c
om
pe
titi
on
)
PET
PROJECTS Not profitable. Usually
“pet projects” that
provide a non-financial
benefit i.e. synergies,
labour retention etc
CASH COWS High grade, small scale
projects, which are quickly
cash generative, allowing
access to an industry and
providing cash for
investment elsewhere.
STARS World class assets with
high grades and large
scale. Will dominate future
sector and be hugely
profitable.
PROBLEM
CHILD Challenging projects with
scale, that could be stars in
a high growth industry,
assuming some structural
changes.
© Greenfields Research Ltd
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0
Lofdal
Wolverine
Hastings
Kutessay II
Bokan
Thor Lake (Basal)
Strange Lake (Enriched)
Kipawa
Norra Karr
Olserum
Buckton South
Buckton
Strange Lake (Granite)
Mt Weld (Duncan)
Foxtrot
Thor Lake (Upper)
Dubbo
Grande-Vallee
Mt Weld (CLD)
Mt Pass
Total Rare Earth Oxide Basket Value (US$/kg)
Heavy rare earth deposits
Advanced light rare earth deposits
© Greenfields Research Ltd
0.000
0.020
0.040
0.060
0.080
0.100
0.120
0.140
0.160
0.180
Dys
pro
siu
m O
xid
e G
rad
e (
%)
Heavy rare earth deposits
Advanced light rare earth deposits
Early stage light rare earth deposits
Some “heavy” rare earth
projects actually have a very
low heavy rare earth grade
The highest grade
“heavy” rare earth
deposits are actually the
high grade “light”
projects
© Greenfields Research Ltd
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60.00
70.00
80.00
90.00
0.00 1.00 2.00 3.00 4.00 5.00
TR
EO
Ba
sk
et
Va
lue
(U
S$
/kg
)
TREO Ore Value (US$/kg)
Focus should be on these:
mainly advanced “light”
rare earth projects
Focus is on these
projects: mainly “heavy”
rare earth projects
Gold ore equivalent: 23.7g/t 47.3g/t 71.0g/t 94.7g/t 118.3g/t
© Greenfields Research Ltd
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30.00
40.00
50.00
60.00
70.00
80.00
90.00
0.00 1.00 2.00 3.00 4.00 5.00
TR
EO
Ba
sk
et
Va
lue
(U
S$
/kg
)
TREO Ore Value (US$/kg)
Gold ore equivalent: 23.7g/t 47.3g/t 71.0g/t 94.7g/t 118.3g/t
PROBLEM
CHILDREN
PET PROJECTS CASH COWS
STARS
© Greenfields Research Ltd
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Examples: Northern Minerals, Hastings Rare Metals, Stans Energy, Tasman Metals, Quest Rare Minerals
© Greenfields Research Ltd
Likely to be > 10 years for a new material
Con
stru
ctio
n
Fin
ance
PF
S
Off-ta
ke
Pe
rmittin
g
Me
tallu
rgy
(Se
pa
ratio
n)
Me
tallu
rgy
(Extra
ctio
n)
BF
S
Me
tallu
rgy
(Be
nific
atio
n
)
Sco
pin
g
Re
so
urc
e
s
Exp
lora
tion
Likely to be > 10 years for a new mine
© Greenfields Research Ltd
© Greenfields Research Ltd
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0
Lofdal
Wolverine
Hastings
Kutessay II
Bokan
Thor Lake (Basal)
Strange Lake (Enriched)
Kipawa
Norra Karr
Olserum
Buckton South
Buckton
Strange Lake (Granite)
Mt Weld (Duncan)
Foxtrot
Thor Lake (Upper)
Dubbo
Grande-Vallee
Mt Weld (CLD)
Mt Pass
Total Rare Earth Oxide Basket Value (US$/kg)
Heavy rare earth deposits
Advanced light rare earth deposits
Assumes separated rare earth oxide prices
Assumes 100% recovery of all rare earths
No assessment of resource grade
© Greenfields Research Ltd
0.002.004.006.008.00
10.0012.0014.0016.0018.0020.00
Ce (US$/kg) La (US$/kg)
© Greenfields Research Ltd
Recoveries range:
6.5% to 41.0% Recoveries range:
65% to 90%
Remember: “basket values” analysis assume even 100% recovery
© Greenfields Research Ltd
RARE EARTHS 101
Resources x reserve recovery x mining recovery x
grade x processing recovery x cracking recovery
(x separation recovery) = LOM production
90% recoveries: 90% x 90% x 90% x 90% x 90% = 59%
75% recoveries: 75% x 75% x 75% x 75% x 75% = 24%
50% recoveries: 50% x 50% x 50% x 50% x 50% = 3%
© Greenfields Research Ltd
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5
10
15
20
25
30
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00
Co
nc
en
tra
tin
g F
ac
tor
(mu
ltip
le)
Ore Grade (%)
96.7%
93.3%
90.0%
86.7% 83.3%
80.0% 76.7% 73.3% 70.0% 66.7%
Percentages indicate equivalent mass
loss to take ore to a 30% concentrate
© Greenfields Research Ltd
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
LYNAS: Mt Weld (Forecast 12 years from purchase to production)
Project
Farm In
Resource
Drilling
Scoping
Study
Feasibility
Study Peer Review
Project
Funding GFC
Refinancin
g Construction PRODUCTION >>>
ALKANE: Dubbo (Forecast 15 years from purchase to production)
Project
Purchas
e Feasibility Study Financing Definitive Feasibility Study GFC
Definitive
Feasibility Study Expanded
FS
Financing /
Construction PRODUCTION >>>
ARAFURA: Nolans (Forecast 12 years from purchase to production)
Project
Purchas
e Scoping Study
Prefeasibilit
y Study
Feasibilit
y Study GFC Feasibility Study
Expanded
Feasibility
Study
Financing /
Construction PRODUCTION
>>>
Second mover rare earth projects • Shorter development time, and lower development cost
• Maturing new market outside of China
Targeting 5-10 years from purchase to production?
COMPARISON OF AUSTRALIAN RARE EARTH PROJECTS
First mover rare earth projects • Delays due to technical problems at feasibility stage
• Faced funding problems throughout due to lack of investor awareness
Typical development timeframe will be 12-15 years
© Greenfields Research Ltd
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TR
EO
Gra
de (
%)
Ore (Mt)
Major early stage light
rare earth projects
Major late stage light
rare earth projects
Heavy rare
earth projects
Early stage light
rare earth projects
© Greenfields Research Ltd
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8.00
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TR
EO
Gra
de (
%)
Ore (Mt)
PROBLEM CHILDREN
CASH COWS
PET PROJECTS
STARS
© Greenfields Research Ltd
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Examples: Rare Element Resources,
Arafura Resources, Peak Resources,
Frontier Rare Earths
© Greenfields Research Ltd
© Greenfields Research Ltd
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8.00
10.00
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TR
EO
Gra
de (
%)
Ore (Mt)
PROBLEM CHILDREN
CASH COWS
PET PROJECTS
WHERE ARE ALL
THE STARS?
© Greenfields Research Ltd
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30.00
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60.00
70.00
80.00
90.00
0.00 1.00 2.00 3.00 4.00 5.00
TR
EO
Ba
sk
et
Va
lue
(U
S$
/kg
)
TREO Ore Value (US$/kg)
Gold ore equivalent: 23.7g/t 47.3g/t 71.0g/t 94.7g/t 118.3g/t
PROBLEM
CHILDREN
PET PROJECTS CASH COWS
WHERE ARE ALL
THE STARS?
© Greenfields Research Ltd
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Examples: Tantalus Rare Metals, TUC
Resources, Namibia Rare Earths, Vale
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
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© Greenfields Research Ltd
$5 billion
$1 billion
20%
80% $800 million
$1,000 million
$200 million
200 20% 5,000 1,000 80% 1,000
© Greenfields Research Ltd
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Examples: Greenland Minerals, Pele Mountain Resources, Alkane Resources, CBMM
© Greenfields Research Ltd
© Greenfields Research Ltd
© Greenfields Research Ltd
Kvanefjeld
(Greenland Minerals & Energy)
Mt Weld
(Lynas)
Mountain Pass
(Molycorp)
Zandkopsdrift
(Frontier Rare Earths)
Nolans Bore
(Arafura Resources)
Dubbo
(Alkane Resources)
Strange Lake
(Quest Rare Minerals)
Eco Ridge
(Pele Mountain Resources)
Hastings
(Hastings Rare Metals)
Bear Lodge
(Rare Element
Resources)
Sarfartoq
(Hudson Resources)
Thor Lake
(Avalon Rare Metals)
Kipawa-Zeus
(Matamec Explorations)
Market Capitalisation
(equiv. US$10 million)
Project Capital Cost
(equiv. US$100 million)
© Greenfields Research Ltd
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Examples: India Rare Earths? Tin
smelter slags?
© Greenfields Research Ltd
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Examples: Alkane Resources, Kimberley
Rare Earths, Avalon Rare Metals
© Greenfields Research Ltd
© Greenfields Research Ltd
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•–
•–
•–
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© Greenfields Research Ltd
Market Share (beating the competition)
Ma
rket
Gro
wth
(a
dd
ing
to
th
e c
om
pe
titi
on
)
6) CASH DOG 1) CASH COW
4) FIND A STAR!
2) HEAVY
PROBLEM CHILD
3) LIGHT
PROBLEM CHILD
5) BY-PRODUCT
CASH COW 7) DO
SOMETHING
ELSE!
© Greenfields Research Ltd
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© Greenfields Research Ltd
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