More Kaiser Quotes"Matamec has been viewed as a market orphan, and with a large overhang of flow-through paper from Mineral Fields coming free trading in November, spec value hunters should not chase the stock above
.50 unless Matamec nails down a financing of at least $5 million so that it can initiate the infill drilling program and larger scale metallurgical studies that the next development stage for the Kipawa project entails. My expectation is that Kipawa will end up with an in situ value of $2-$3 billion which will likely translate into a $100-$150 million net present value or a stock price target in the $1.00-$1.50 range. Currently using 4 year average FOB prices the existing rare earth enriched resource has an in situ value just short of $1.3 billion, which swells to $3.6 billion using FOB spot prices. I expect a 50%-100% resource estimate boost by the end of 2010 as a result of the summer 2010 expansion drilling, so a $2-$3 billion in situ value with a $150-$200 per tonne rock value reflecting a long term average somewhere between current domestic Chinese and FOB spot prices is a reasonable outcome for Kipawa. Matamec will either be scooped through a surprise takeover bid by an Asian end-user or one by a better financed rare earth junior seeking either diversity of supply or to supplement an existing light rare earth dominated project portfolio."
"Conclusion: I am issuing a Good Relative Spec Value Buy at
.40 with a
.50 buy limit and a six month target of $1 based on the assumption that a PEA will support an NPV in the $100-$150 million range when it is delivered in Q2 of 2011. I cannot issue an "absolute" buy because we do not have a third party discovered cost structure for the Kipawa project. However, compared to other rare earth juniors in a space for which a bubble is just beginning to form, and which I believe will grow much bigger with absolute liquidity bestowed on the main contenders and considerable spillover impact on the also-rans, Matamec is relatively cheap given the stage and nature of its Kipawa rare earth project. The key to my prediction that Matamec will get swallowed at a valuation double to triple the current valuation is metallurgist Les Heymann, who has generally been a cautious voice warning about the obstacles that the metallurgy stage poses for rare earth projects, as well as Tony Mariano, who has also been a fountain of pessimism but has pounded the table on behalf of Kipawa as a challenge with an imminent solution. When these experts see a breakthrough, and at least one of them signs his name to a press release declaring such breakthrough, one has to pay attention."