The announcment is that ARU has got another US$75 million from the Korean Credit Export Agency (KEXIM).

With GE stalling on their offtake (due to their turbine division internal issues), ARU will be going to the other major players. ARU will def find another teir 1 off take player. This could change the funding mix. Ie if the other off take player is not german, then they may have to use their Export Credit Agency etc. This has def slowed their Financial Close. But I feel like they should be able to get there by March/April 2024 and with little dilution (ie only a small capital raise). I just hope they don't screw retail investors if they do go down the cap raise.

I have done some modelling of their business with a range of variables. But through all of the scenarios, I had always put in a larger capex (around $1.3 billion when they had about $1 billion in their Definitive Feasability Study.). The additional time lag has meant that inflation has absorbed some of that 'fat' i had put in. But I had also kept constant the operating costs of about $30/kg as opposed to their figure of $25/kg. Again i would assume some of that 'fat' will have been absorbed. I also assumed that it would take three years to be at a decent production (as opposed to their low 2 year figure). The NdPr prices have been steadily increasing again. But China is 100% manipulating the market prices. From the research I have done (and it's hard to get a definitive picture of how the Chinese operate their mines), the Chinese are selling at cost or a bit below cost. And that is at the current NdPr price of around US$60/kg. ARU's break even (at my inflated costs and timelines) will about US$55/kg and will be one of the cheapest rare earth producers AND do it with the best ESG credentials. With lots of companies now keen to spruik their ESG, I think this will make ARU's product highly sought after. And then there are the geopolitcal considerations that can only help ARU.

In summary the fundamentals of the project have not changed. GE stalling on their offtake obviously threw ARU's Financial Close off the timeline. I think we will hear some new off take announcment ealry next year (around mid Feb). And then hoepfully they can close this beast and start building!

I have looked back at how I could have invested in this stock better. And I feel that I entered about the right time except for two things that happened. The first was the chinese selling their stake in ARU on market. I has assumed that Gina or a big Insistution would have bought off market. So that constant selling gave the shorters and manipulators an opportunity. The second part i got wrong was that GE would fall away as an off taker. This has added 6 months to the timeline.

Anyway, good learning.

Parko

PS it is a bit of a ramble....but if anyone is interested, i can present more detail on any of the above or other issues regarding ARU or Energy Transition etc.