Tasman Metals (TSM): PEA Supports Robust Project Economics

 

TASMAN METALS LTD.

TSM-TSX.V: $2.35 – STRONG BUY

12 MONTH TARGET PRICE : $6.10 | PROJECTED RETURN: 159.6%
VALUATION: 15% DISCOUNT APPLIED TO NAV

Nick Agostino, MBA, CFA, P.Eng.


PEA SUPPORTS ROBUST PROJECT ECONOMICS
  • Positive PEA headline numbers: PEA report highlights $1.46B pre-tax NPV (@10% discount) for the Norra Kärr project for a 40-year project; $1.2B for a 20-year project. IRR 49.6% with 2.6 year pre-tax payback. Indicated and Inferred resource estimate stands at 58.1 Mt combined with 0.59% TREO grade producing 6,800 tpa TREO; HREE content at ~50%.
     
  • TREO price deck conservative: PEA uses, in our view, conservative TREO price of $51/kg (31.60/kg for concentrate); we continue to model TREO of ~$80/kg.
     
  • Opex 30% lower than expected: PEA opex estimate of $10.93/kg REO is 30% lower than our estimate; difference solely in processing costs. We have lowered our estimate to $11.17/kg REO.
     
  • Capex 52% higher than estimated: Capex estimate of $290M is $100M higher than our previous estimate; difference lies in higher tailings cost and a conservative 30% contingency allowance.
     
  • Valuation unchanged: Target price unchanged at $6.10/share.

Cheers,
Nick

Nick Agostino, MBA, CFA, P.Eng.
Euro Pacific
 

 

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