Ionic Rare Earths

Ionic Rare Earths

ACF_Ionic-Rare-Earths

Ionic rare earths

Company Statement: Ionic Rare Earths Limited (“IonicRE”) is focused on developing its flagship Makuutu Rare Earths Project (“Makuutu”) in Uganda into a significant long life, low-cost, supplier of high-value critical and heavy rare earths.

Makuutu is an advanced-stage, ionic adsorption clay-hosted project highlighted by near-surface mineralisation, significant exploration upside, excellent metallurgical characteristics and access to tier-one infrastructure.

The ionic adsorption clay-hosted geology at Makuutu is similar to major rare earths projects in Southern China, which are responsible for the majority of global supply of low cost heavy and critical rare earths, specifically the high value magnet metals (Dysprosium and Terbium) Heavy Rare Earths (>98% originating from ionic clays). Metallurgical testing at Makuutu has returned excellent recovery rates, which provide multiple avenues for a simple process route.

  +44 20 7419 7928

Value Range, 05 February 2024

Intrinsic Price (AUD) 0.094
Value Range Low (AUD) 0.090
Value Range High (AUD) 0.099
Implied MCAP (m) 407.27
Implied EV (m) 407.27
XASX IXR
Financial YE 30-Jun
Currency AUD

Business Activity

Mining E&P

Key metrics

Close Price (AUD) 0.019
MCAP (m) 86.17
Net Debt (Cash) (m) -11.13
EV (m) 75.04
52 Wk Hi 0.037
52 Wk Lo 0.016

Key ratios

(Net Cash) /Shareholder Equity %    -12.91%
FX Rate AUD/USD 0.65

Mining Sector Research
ASX Market Index
Analyst Team
+44 20 7419 7928
mining@acfequityresearch.com

ionic rare earths multiples table

Company overview

Ionic Rare Earths Ltd (ASX:IXR). We have raised our valuation range 26%. IXR is a rare earths mining explorer (Uganda) and REO magnet recycling company (Belfast, UK). We have excluded Belfast recycling from our valuation at this stage. Catalysts since ACF’s IXR Initiation note published on 05 Dec 2023 include IXR’s ownership in the Makuutu project rising to 94% up 34pp from 60%; IXR was awarded the first ever large-scale mining licence by the government of Uganda on 18 Jan 2024; IXR appointed a new Executive Chairman last week. IXR’s Makuutu ownership increase has significantly impacted our valuation, we raise it 26% to A$0.094 vs A$0.075 previously. IXR’s flagship Makuutu REE project contributes to… To read more download note… To read more download note

          ➢ Makuutu MREC production start on track for 1Q24E

          ➢ P5 potential of +532 Mt @ 640 ppm TREO (included in NPV)

          ➢ IonicTech Belfast magnet recycling plant begins 24/7 operations

          ➢ IXR slates further ~A$2m raise

          ➢ Cash & CE 1Q24A (31 Dec 2023) A$ 4.5m

Investment Case

IXR (lighter line) ASX market vs price relative

We have raised our IXR valuation range 26% after several milestones/catalysts have been reached. IXR is a rare earths explorer and permanent magnet recycling business for clean energy technologies, e.g. wind turbines, electric vehicles (EVs). IXR has a low-capital cost, high value rare earths mining project that is a global supply chain strategic asset – The Makuutu project provides an advanced stage, low capital cost, high value heavy rare earths development opportunity. Makuutu’s geology is a key advantage – Ionic Adsorption Clay (IAC) mineralization.

Makuutu’s geology is similar to projects in Southern China and Myanmar where the lowest cost to extract/most readily available sources of Heavy Rare Earth Oxides (HREO) are mined. ~98% of the global supply of Heavy Rare Earths originates from clay-hosted mines there. Although China dominates the REE market and REE prices, IXR has a competitive advantage given its plan to create a circular economy from REE mining to magnet recycling.

Advancing Makuutu: We have valued Makuutu based on the latest upgrade potential of I+I resource 532 Mt @640 ppm including the Probable reserve of 172.9 Mt @ 848 ppm.

Our value range is A$ 0.0897 to A$ 0.0991 p/s suggesting 348% – 396% (~2x-3x) upside.

Circular Economy: Ionic Technologies Magnet Recycling Demonstration Plant in Belfast, UK has begun 24/7 operations and has already processed 2.7 tonnes of end of life (EOL) permanent magnets (excluded from our valuation)… To read more download note

Ionic Rare Earths Financials 2026E – 2029E $(m)

Revenue vs Operating Cost

Ionic Rare Earths catalysts

     ➢ Final Investment Decision (FID) 2H24

     ➢ Makuutu production start 1Q24E

Increased MRE

Long run rising critical metals prices

PFS for Belfast demo plant 2Q24

FS for Belfast commercial plant 3Q24

Evidence of growth in permanent magnet recycling and a global circular

economy for REEs

 

50% of revenue basket NdPr

35% of revenue basket Dy & Tb

15% of revenue basket HREE incl. Sm, Gd & Ho

Additional research notes

Ionic Rare Earths Post-Results 1H24 21032024

Ionic Rare Earths Makuutu Licence Signed 25012024

Ionic Rare Earths Initiation Note 05122023

Ionic Rare Earths Core Investment Case Update 14082023

Ionic Rare Earths Core Investment Case 21032022

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