Consensus community valuation
Thought it would be good to revisit ASM with all the hype about Critical Metals and if there is still value here now that MTM share price is ramping up
Like MTM, ASM has metal refining technology but focusing on REE oxides.
When I last held years ago they only had the KMP facility and a few MOUs. Now ASM is planning to build a plan in America
Unlike MTM, ASM has released their economic model of revenue and margins.
In reality we are still to see any meaningful revenue come through even though they delivered 19t of NDPr metal. This is mainly due to not having any binding agreement in place.
In summary the opaque nature of the pricing (they mention they delivered X tonnes but at what price?) and lack of binding sales is a headwind for ASM as we don't know for certain the future revenues for the future. This is where the advantage lies with MTM as they are not just in REE but also Gold and other critical metals where pricing is easily accessible and you can form a model of revenue. The fact that MTM did not spend time releasing a financial model yet is interesting but I guess maybe we get an idea when the FJH pilot plant is up and running.
Just to add here are some conditions on the build of the AMP
[not held]
No matter what happens, geology does not change and perhaps the process workflow too.
Reactivating old straw from last year:
A link on Dubbo Rare Earths geology for anyone interested
http://portergeo.com.au/database/mineinfo.asp?mineid=mn1396
Long read, but it may explain some of the challenges faced in getting the mine up and running and the share price decline. Highlighting parts of interest.
Think if this deposit was monazite, then the situation at ASM would be totally different.
I have been invested in Australian Strategic Materials (ASM) for longer than I care to remember.
It is very much a speculative play imo.
However, this morning the company announced they have received a Letter of Interest of US$600M from the US Export Import bank EXIM to help them construct their Dubbo Critical Minerals Project. This may be the best news the company has ever released and, in my view, will be the catalyst for more good news (offtakes and funding) in the near term.
Am I over egging the pudding here??
Adding to straw by @Hackofalltrades
That HC post is using the Nd spot price.
Need the NdFeBr spot price but it is hidden in secret away from prying eyes.
Maybe I will consider the free trial. There is pricing info for Nd at Tradingeconomics. at 555000 yuan/T
Back tot he subject, I get around 118987.01*600*0.6=42,835,323.6 AUD according to the article from USA Rare Earths about their production plans
https://www.evpulse.com/features/u-s-production-of-critical-rare-earth-elements-to-start-in-2024
The HC price is using the 1200 figure which is the upside case.
On that note, I wonder if ASM can source that much feedstock from Vietnam Rare Earths even with that MOU.
The other thing is I see some institutions coming in big around June while the selling from the Blackrock and State Street was reducing which is what prompted me to follow after some positive price action (see the bottom pic versus the top)
The last few days felt like there was a leaking ship somewhere with the positive price action.
[held]
Appears competitor companies have already signed agreements to secure supply to produce rare earth materials. This looks like a binding agreement with Setopia and a company in Vietnam. ASM only has some sort of non binding agreement
https://news.mt.co.kr/mtview.php?no=2023030814071835896&type=1 (put in google translate)
With ASM share price at 52 week lows and performance rights cancelled from not meeting milestones, I wonder if the CEO/MD will do an on-market buy.
VanEck appears to be reducing its holdings in ASM. This is the snapshot from factset dated 31/8/22 (from my University Student account)
There was another thread on hotcopper saying that VanEck has completely exited its position.
Maybe a good idea to wait before buying
[h]