Caesars Report: Resources – Building an Economic Model

A recent report on ceasarsreport.com highlighted Medallion Resources Ltd. (TSXV:MDL, OTCQX:MLLOF) and explained how the company is planning to produce REE’s it will recover from monazite, a waste product of certain mineral sands operations.
As quoted from the report:

Medallion Resources is not your average resource company.  The company has no intention at all to build and operate its own mines, but would rather like to position itself as a mineral processor in the REE-sector.

We dare to say the huge majority of the non-Chinese REE-mines are treading water at best, consider being cash flow negative a ‘normal scenario’ whilst so many other REE-hopefuls are about to throw the towel.

As a services provider, the market should also look at Medallion differently, as the operating risks will be tremendously lower. Medallion won’t have to deal with labour unions, changing mining laws nor any other risks associated with a mining project. Nor will it have to construct any infrastructure. The processing facility will be located in a safe first-world country which reduces the risks. It will also make it easier for us to try to establish a NPV for the company’s operations as the majority of Medallion’s revenue and operating costs will correlated to each other. Should the REE prices go down, Medallion will pay less for its feed stock. In case the REE prices are increasing again, Medallion will have to pay more for its feed stock but will see its operating margin expand.

Medallion’s plans could unlock quite a bit of shareholder value, as our NPV calculations indicate the company’s business model definitely has a chance to be successful, even at the current low price environment in the REE sector.

Of course, Medallion still has a lot of work to do and we expect the company to go back to the market within the next few months to raise the funds that will allow Medallion to continue its metallurgical test work at the pilot plant scale. Once the pilot plant will confirm the expectations, Medallion could really start to look at where it intends to build its plant and locking in supply and offtake agreements for its incoming monazite and outgoing Rare Earth concentrate.

Keep an eye on Medallion because if the economic model gets confirmed, the payoff could be huge.

Connect with Medallion Resources Ltd. (TSXV:MDL, OTCQX:MLLOF) to receive an Investor Presentation.