John Meyer, SP Angel mining analyst, has initiated coverage on Harena Rare Earths (LON:HREE), the rare earths company focused on the Ampasindava ionic clay rare earth project in Madagascar, with a ‘BUY’ rating and 9.4p price target.
He believes the company holds a strategic advantage in the market due to the location of its main asset, Ampasindava, in Madagascar - where it is beyond the control of China, which controls about 90% of the market for rare earths.
In this interview investors will learn:
- Why January’s Pre-Feasibility Study was key to his rating
- Why being outside China is beneficial for commodity pricing and funding
- How Madagascar has the edge over China in its export rules
- How US demand is being driven by very low stocks of rare earths
- Why unrest in the Middle East could increase US demand
- Why the addition of heavyweight investors adds credibility
- What his thoughts are on Harena’s interest in acquiring California-based Paradigm Critical Minerals
Reasons to ADD HREE to your watchlist:
- Experienced management team
- Large-scale Ionic Clay REE project
- Offtake term sheet secured
- REE prices expected to rise fuelled by security of supply
- Base case post-tax NPV10 of US$250m; IRR of 30%
- Experienced Institutional investors already on the shareholder register
- Unique REE play as the only LSE-listed ionic clay REE project
John Meyer, mining analyst at SP Angel, was interviewed by Karl West for focusIR.
