Altona Rare Earths - Initiation of Coverage
Creation of a multi-asset Rare Earth Element vehicle in Africa with a number of projects that can be put into production rapidly or sold
Altona Rare Earths is the old Altona Energy which joined AIM in 2005. Its large, troublesome coal project in Australia never really got off the ground and with delisting looming, Altona moved onto the Acquis Exchange. Christian Taylor-Wilkinson took over the reins in March 2020 with a new management team that disposed of the coal interests and sought a long-term sustainable mining solution which could be in production within 3 years. They smartly chose Rare Earth projects, guided by consultant geo Cédric Simonet (now COO) who has a superlative knowledge of African resources projects.
Rapidly evaluating a hit list of Ionic Clay opportunities in Africa
So far only a handful of the other types of REE projects have been discovered in Africa like the hot Ionic Clay Adsorption REE and residual monazite projects. COO Cédric Simonet has a hit list of other such opportunities. Some might be small, but they could still be swiftly put into production, generating potentially US$25million annually over a mine life of well over 5 years, or sold.
Cracking REE project No 1 should attract a lot of attention on LSE listing
Altona is rapidly moving its Monte Muamba REE project up the valuation curve. Already, a 57Mt @ 1.65% TREO JORC Exploration Target has been established close to the surface with more to come. A maiden JORC Resource and Scoping Study are set to be released in Q1 and Q2 2023 respectively and should start to suggest the potential size of the prize.
Leveraging off the team’s extensive African network to do more deals
The new management team is seeking to build a larger investment portfolio of undervalued projects by leveraging off their extensive network across Africa and originating deals for appraisal, development and producing assets which add production and material reserves/resources.
Peer group analysis suggest 300% potential upside
Our highly conservative valuation leads us to initiate coverage of Altona Rare Earths with a target price of 33.7p and Speculative Buy stance.
RISK WARNING & DISCLAIMER
Altona Rare Earths is a research client of Align Research. Align Research own shares in Altona Rare Earths. Full details of our Company & Personal Account Dealing Policy can be found on our website http://www.alignresearch.co.uk/legal/
For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.
| Year to end June | 2021A | 2022A | 2023E | 2023E |
|---|---|---|---|---|
| Revenue (£’000) | - | - | - | - |
| PTP (£’000) | (733) | (810) | (2,050) | (4,000) |
| EPS (p) | (7.73) | (2.72) | (4.91) | (4.76) |