Dundee Securities Initiates Coverage on Quest Rare Minerals Ltd.-Sets a Buy Recommendation With a 12-Month Target Price of $8.88
TORONTO, ONTARIO--(Marketwire - Jan. 26, 2011) - Quest Rare Minerals Ltd. (TSX VENTURE:QRM) is pleased to report that Dundee Securities Corporation initiated investment research coverage on the Corporation today. The author of the report, entitled "Canada's Best Heavy Rare Earth Opportunity," Mr. Rodney Cooper, Senior Analyst, Mining, initiated a BUY, Speculative Risk recommendation for QRM at a 12-month target price of $8.88. A full copy of the Dundee Analyst Report has been posted to the Quest Rare Minerals website homepage at http://www.questrareminerals.com/pdfs/QRM%20Initiating%20coverage.pdf for viewing. In the report, Mr. Cooper wrote, "Quest has a compelling in-situ value exceeding C$18 billion, representing a C$274 in-situ value per share, the highest of any Canadian rare earth project. With a market capitalization of only C$0.021 per dollar of contained TREO value, Quest is truly undervalued compared to an average of C$0.14 per dollar contained TREO for 15 peer projects." In addition, by assuming long-term price for a basket of total rare earth oxides ("TREO"), niobium, and zirconium of US$19.68/kg, US$25/kg, and US$3.77/kg, respectively, a Net Asset Value (at a 10% discount rate) of $701 million Canadian, or $11.11 per share was calculated. Mr. Cooper discounted the NAV by 30% to come up with his $8.88 minimum target price in his evaluation. Other positive parameters for the project and Quest that the author has identified include: COMPELLING ECONOMICS The in-situ value exceeding C$18 billion, representing a C$274 in-situ value per share, based on: /T/ -- a project net present value (January 2012) at a 10% discount rate, after taxes but pre-financing, USD 354 MILLION, -- an after tax internal rate of return of 18% -- Average annual after-tax cash flow is USD 162 MILLION -- Payback is less than 4.1 years. /T/ INVESTMENT UPSIDE / BLUE SKY Quest is an opportunity for investors at the current level: /T/ -- has a TREO value of US$274 per share and 156% higher than the average of only US$107 per share -- undervalued compared to the sector in situ average for 15 peer projects of C$0.14 per dollar contained TREO vs Quest's C$0.021 per dollar of contained TREO) -- A revised resource estimate based on the 2010 drill program is expected to be released in February, which will update global resource data -- The value of TREO at Strange Lake is US$16/kg based on 2009 prices, the third highest in the universe of 26 project compared to Strange Lake by Dundee Securities -- Quest's TREO value per share exceeds the two companies with projects that will be in production in 2011 and 2012, being Lynas Corporation (Mount Weld) at US$9 per share, and Molycorp (Mountain Pass) at US$99 per share. /T/ "We appreciate the support shown by Dundee and by Mr. Cooper in the analysis of QRM as it vindicates what we have been communicating to the market from the very beginning in that Strange Lake should become a highly valuable, world-class rare earth resource in the future," said Peter J. Cashin, Quest's President & CEO. About Quest Rare Minerals Quest Rare Minerals Ltd. is a Canadian-based exploration company focused on the identification and discovery of new and significant Rare Earth deposit opportunities. The Corporation is publicly listed on the TSX Venture Exchange as "QRM" and is led by a highly respected management and technical team with a proven mine finding track record. Quest is currently advancing several high potential projects in Canada's premier exploration areas: the Strange Lake and Misery Lake areas of northeastern Quebec, the Kenora area of northwestern Ontario and the Plaster Rock area of northwestern New Brunswick. Quest's 2009 exploration led to the discovery of a significant new Rare Earth metal deposit, the B-Zone, on its Strange Lake property in northeastern Quebec. The Corporation recently filed a 43-101 Inferred Resource Estimate on the B-Zone deposit and has completed a Preliminary Economic Assessment (PEA) for the deposit. In addition, Quest announced the discovery of an important new area of REE mineralization on its Misery Lake project, approximately 120 km south of Strange Lake project. Quest continues to pursue high-value project opportunities throughout North America. As a result of a recently-completed marketed equity financing, Quest has a strong working capital position in excess of $51.0 million. This will be sufficient to advance the Corporations plans of completing a pre-feasibility study of the B-Zone REE deposit by 2011-2012 and to continue exploration on its other rare earth property interests. Forward-Looking Statements This news release contains statements that may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable securities legislation. More particularly, this news release may contain forward-looking information concerning the Strange Lake B-Zone Rare Earth Element (REE) deposit held by Quest Rare Minerals Ltd. ("Quest"). This forward-looking information is subject to numerous risks and uncertainties, certain of which are beyond the control of Quest. Actual results or achievements may differ materially from those expressed in, or implied by, this forward-looking information. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that Quest will derive. In particular, no assurance can be given with respect to the development by Quest of the Strange Lake B-Zone Rare Earth REE deposit. Forward-looking information is based on the estimates and opinions of Quest's management at the time the information is released and Quest does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
?For those of you wondering why rare earth stocks jumped today, Jim Dines put out an interim warning bulletin that while he thinks the general market is not yet in an oversold condition, the rare earth sector is positioned to buck the trend. It has also helped that JP Morgan upped its target price for Molycorp from $87 to $105, and pointed out that if it it uses current domestic Chinese prices for the Mountain Pass basket for 2014 onwards the NPV based target works out to $106. My feeling is that the market is becoming educated to ignore FOB spot prices which have nowhere to go but down and is starting to focus on the price Chinese factories must pay for rare earths. My suspicion is that China will unveil a policy which allows the abundant rare earths such as cerium, lanthanum and yttrium, which have significant FOB over domestic price premiums, to be exported more readily. This will allow FOB prices for these rare earth oxides to come down, which the bears will spin as confirmation that the "rare earth bubble" is over. In fact, it would undermine the new mantra that rare earth bears such as Jon Hykawy are pushing as the new narrative, namely that the high FOB prices are causing demand destruction for rare earths among non-Chinese end users.
Without question end users in the face of severe interim supply shortages must try to engineer around rare earth inputs. What the end-users must grasp is that the shortages are a frustrating but temporary problem, provided projects outside of China get developed expeditiously. Steps by China that ease the perceived pain by making the more widely used rare earths such as cerium, lanthanum and yttrium available through specific export quotas of a use it or lose it nature would help in this regard. From a rare earth junior valuation perspective this would be a positive development, because it could result in somewhat higher Chinese domestic prices for these rare earths, which sophisticated analysts who know to use the domestic price in their models would read as a boost for the juniors.
Quest shareholders will be pleased to note that the JP Morgan analysts include Strange Lake in their list of future supply contenders, albeit with the warning that they do not think anybody but Lynas and Molycorp will ever deliver any supply because of the lack of rare earth experience. On the other hand they suggest Avalon's Nechalacho and Quest's Strange Lake will be in production by 2015, while relegating Great Western's Steenkampskraal and Hoidas Lake to "post-2015".
The JP Morgan analysts continue to avoid dealing with the fact that apart from europium Molycorp has virtually no heavy rare earths in its supply portfolio. Also, was anybody else puzzled by Great Western's announcement that it had hired somebody with meteorological experience to help with SKK??
dass so wenige auf Quest bisher aufmerksam geworden sind...ich habe mich hier mal bei 3,80 Euro bedient in den vergangenen Wochen...die haben ausserdem genug Cash, um eine Sommerflaute zu ueberstehen....
Die Gesellschaft kann eines der ganz wenigen primären Vorkommen der heiß begehrten Schweren Seltenen Erden ihr Eigen nennen. Experten bescheinigen dem Projekt absolutes Weltklasseformat. Und auch der Vorstand erwartet, dass sein Unternehmen in nur wenigen Jahren eine ganz große Rolle am Seltene-Erden-Markt spielen wird. Besonderer Pluspunkt außerdem zur Konkurrenz: die voraussichtlich enorm niedrigen Förderkosten.
Bin jetzt auch dabei! Meiner Meinung nach eine super Chance! Man bedenke nur wie gefragt seltene Erden schon jetzt sind und dass der Bedarf in den nächsten Jahren mit Sicherheit nicht abnehmen wird. Wenn man sich die Zahlen anschaut schaut das ja auch schon sehr vielversprechend aus. Der Verlust ist in Q2 um über 700% gesunken! Jetzt ist die Chance sich billig einzukaufen und in 2-3 Jahren saftige Gewinne rauszuholen! Also wer ein Geld auf der Seite hat hier gibt es was zu holen ;-)
Der Kurs ist ja vom hoch bei 8$ ganz schön zurückgekommen. Schätze wir werden noch in diesem Jahr ein neues hoch für die SE sehen, da China bereits angekündigt hat die SE für eigene Herstellung von Gütern zu verwenden und die Exportquoten nicht wieder zu erhöhen.
?To be delivered by calendar July-August 2013 ?Bulk of engineering work has been completed ?Quest is examining potential refinements to the Strange Lake Project to: ?further reduce project risk ?lower capital costs ?lower operating costs ?allow for an earlier mine commissioning date
COMMENCE FULL PILOT PLANT: Q2 2013
DELIVERY OF PRE-FEASIBILITY STUDY: H2 2013
DELIVERY OF FEASIBILITY STUDY: Q2 2015
SOCIAL LICENCE CONSULTATIONS, MOU, IBA.: 2013
ESTABLISHMENT OF SUPPLY AND STRATEGIC DEVELOPMENT AGREEMENTS: 2014
"Quest Rare Minerals Signs a Letter of Intent for Sale of 100% of Strange Lake's Expected Zirconia Production"
TORONTO, ONTARIO--(Marketwired - July 9, 2013) - Quest Rare Minerals Ltd. (TSX:QRM) (NYSE MKT:QRM) is pleased to announce that it has entered into a non-binding Letter of Intent ("LOI") with TAM Ceramics Group of NY, LLC ("TAM"), a leading U.S.-based marketer and manufacturer of zirconia chemical products. The LOI specifies that TAM will agree to purchase from Quest up to 24,000 tonnes of zirconia annually which Quest expects to mine from its Strange Lake deposit, and that Quest will deal exclusively with TAM for the sale of this quantity of product. This constitutes 100% of Quest's anticipated annual zirconia production from Strange Lake.
The LOI also provides that TAM will coordinate with Quest to develop markets for zirconia.
The purchase and sale of zirconia contemplated by the LOI is subject to the execution of a definitive agreement between Quest and TAM which will include, among other things, the price of all zirconia to be sold and other material terms and conditions of the transaction. Quest and TAM have agreed to negotiate the definitive agreement in good faith, with a view to executing it as soon as possible, but in any event no later than December 31, 2014. The LOI provides that the definitive agreement will have an initial term of five years, with five possible renewal terms of five years each, for a total potential contract term of 30 years, covering the anticipated minimum 30-year production life for the Strange Lake deposit.
"The signing of our first off-take LOI, in this case for all of our byproduct zirconia, is a major milestone in the development of the Strange Lake deposit," said Peter Cashin, Quest's President and Chief Executive Officer. "We believe that Strange Lake is a world-class asset that has the potential to produce a substantial quantity of strategic materials that will be attractive to customers around the globe. The LOI is the result of our continuing marketing efforts to engage customers with whom we intend to develop lasting business relationships. We view TAM's involvement with our Strange Lake project as a significant vote of confidence in the considerable progress we have made in precipitating chemical-grade zirconia product at our pilot plant. The LOI will allow us to develop a partnership with a company that has many years of zirconium marketing and manufacturing experience."
"TAM is excited about the opportunity to partner with Quest to commercialize significant quantities of zirconium-based materials, such as zirconium chemical products and high-purity zirconia, into the global market," said George Bilkey, TAM's President. "These zirconium-based derived materials are an excellent complement to TAM's 80-year global zircon and zirconia business. We very much look forward to working with the Quest team."