Geomega Resources Inc. / TSXV: GMA
Provides an update on demo plant, project design change, and start of site preparation activities at Saint-Hubert facility (Quebec)
FRC Opinion : Negative – Geomega has developed a potentially eco-friendly/cost-effective process to recycle rare earth elements, and other valuable materials, from end-of-life magnets, scraps, and other feeds. The company is aiming to build a demo plant for rare earth recycling in Quebec.
However, GMA's recent studies uncovered design flaws regarding water discharge management, prompting revisions while aiming to maintain the daily throughput at 1.5 tons. We will produce an update report once a revised design is completed, and when we have more clarity on the proposed plant's cost structure and other key metrics. For conservatism, we have decided to delay demo production by two years, and increase the discount rate from 15% to 20% in our valuation models. Consequently, our fair value estimate has decreased from $1.20 to $0.78/share.
*FRC provides issuer paid coverage.
*Past performance is not indicative of future results