Edison Issues ADR Update on Rare Earth Minerals

LONDON, January 20, 2016 /PRNewswire/ --

Contrary to current sentiment surrounding the mining industry is the realistic positive outlook for lithium. The electric vehicle (EV) market has experienced heightened interest despite a more than halving of the oil price over the past year, helped in no small part by North American EV evangelists and by the Volkswagen (VW) scandal. The latter has already caused the automaker to unveil new, purer clean-tech vehicles to help recover its brand image. In our opinion, lithium supply risk may not be correctly factored into the ambitious plans of EV automakers, which should be recognized as a positive for investment into the lithium mining subsector.

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Our previous base case valuation was for the Sonora Lithium Project, for which REM commissioned its own LCE-based scoping study. This will be superseded initially by BCN's PFS in Q116, and then by a BFS. We therefore suspend our valuation and await the release of the PFS to revisit our forecasts relating to the development of the Sonora Lithium Project. We will also seek to address the potential value of REM's stake in the Yangibana rare earths project held in JV with Hastings Rare Metals, on release of that PFS, also expected during Q116.

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About Edison: We are an international equity advisory firm. We enable our client companies to achieve their capital market objectives. The team is made up of more than 80 analysts and investment professionals with many decades of experience. Our extensive company knowledge and industry expertise spans 10 business sectors and more than 700 listed companies globally. We give our corporate clients and investors privileged insight into global investment trends. Our distribution capability is key to ensuring a global investor audience can access our investment knowledge. Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact:
Tom Hayes,
Edison Investment Research,
+44-(0)20-3077-5725

Charles Gibson
Edison Investment Research
+44-(0)20-3077-5724
[email protected]

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SOURCE Edison Investment Research

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