Viridis Mining and Minerals (ASX:VMM) is well positioned to deliver improved economics at its Colossus rare earth project following stronger-than-expected demonstration plant recoveries and progress toward a Solvay offtake agreement, Euroz Hartleys said in a Thursday note.
Euroz Hartleys said the Colossus demonstration plant achieved July average recoveries of 79% magnet rare earth oxides (MREO) and 64% total rare earth oxides, exceeding pre-feasibility study (PFS) assumptions, with peak MREO recoveries above 80% despite processing lower-grade ore from the northern concessions.
The research firm noted that the demonstration plant achieved strong metallurgical performance despite processing feed averaging 803 parts per million (ppm) of MREO, below both the PFS life-of-mine average of 936 ppm and the 1,420 ppm head grade used in earlier Australian Nuclear Science and Technology Organization bulk composite testwork.
The research firm estimates stronger recoveries could materially improve definitive feasibility study (DFS) economics, lifting its risked net asset value by about AU$0.30 per share, with further process optimization offering additional upside.
It also highlighted progress with Solvay, expecting a binding offtake and technical services agreement in the September quarter and higher mixed rare earth carbonate (MREC) payabilities in the DFS, supported by the planned commercial-scale lanthanum removal circuit.
It raised its risked net asset value by 2% to AU$5.40 per share after updating its model with improved ore-to-MREC recovery assumptions ahead of the DFS.
Euroz Hartleys maintained a speculative buy rating on Viridis Mining and Minerals while raising the price target to AU$5.40 from AU$5.27.