Re: REM Stream Log - REM's investment strategy is twofold:...

REM's investment strategy is twofold: to increase its ownership of lithium development companies and to invest directly in lithium and to a lesser extent in rare earth projects. Tesla Motors' project to build a large-scale dedicated lithium-ion battery factory near Reno, Nevada, highlights the opportunity for the Sonora resource. Our base case valuation is for the key Sonora Lithium Project, for which REM has commissioned its own scoping study. This outlines 34.6Mtpa of run-of-mine (ROM) ore with an average output of 69.8kt of battery-grade lithium carbonate (LCE) or equivalent over a 20-year mine life; we tentatively estimate that production will start in 2017, which is based on BCN timelines. The study details capex of US$485m and a US$6,500/t LCE price and we apply a 10% discount rate to reflect general equity risk. On this basis we value REM's effective 40.06% of Sonora at 2.40p per share. Further value is geared to the value of the Magdalena Borates project 100% owned by BCN, and in which REM has an effective 14.37% interest, and REM's 30% direct interest in the Yangibana REE project in Western Australia. To download this report, please click here. All reports published by Edison are available to download free of charge from its website [link]