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RESEARCH: Greenland Minerals Lowering Costs At Kvanefjeld

FYI | Feb 05 2019

Kvanefjeld’s cost position improves regularly

By Pitt Street Research

Greenland Minerals’ Kvanefjeld Rare Earths Project in Greenland covers the world’s largest undeveloped Rare Earths deposit. A notable aspect of the Kvanefjeld story has been the way in which Greenland Minerals and its collaborators have progressively driven down the estimated project cost base since the initial Feasibility Study was published in 2015.

Recent announcements have suggested that Kvanefjeld’s costs can be lower than previously thought and point to a strong Feasibility Study update in 2019. A joint venture by Greeland Mineral’s partner Shenghe related to rare earths concentrates containing uranium also eases the path to project start up. This note updates our 20 September 2018 initiation report on Greenland Minerals.

Investment case
The Kvanefjeld Project, which we believe can potentially start production in 2021, is valuable in part because of its favorable metallurgy and wide spread of critical Rare Earths. A steady increase in Rare Earth and U3O8 prices, further progress on the Kvanefjeld flowsheet, and completion of permitting in Greenland can help drive favourable sentiment and re-rate the stock into our valuation range.

Valuation range of $0.18 – 0.43 per share
As per our 20 September analysis we value Greenland Minerals at 18 cents per share base case and 43 cents per share optimistic case using a DCF approach with conservative assumptions on Rare Earths.

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