Unlocking value

Nice recent price move but SPX is definitely below the radar and should eventually re-rate. Good proactive management that clearly thinks they are onto something very promising and are taking all the right steps to unlock value for shareholders (can’t be under-estimated).

Very low liquidity, which can result in downward price pressure on small volumes (as we’ve seen recently) in the absence of buyer interest, but potentially strong moves to the upside should buying volume increase.

Overall:

- Promising thick (~9m) surface mineralised zone with low contaminants – shallow deposit should be very cost effective
- High value suite of REO – significantly more valuable product basket than Lynas and Molycorp. Based on their high level annual production estimates (20 year mine life) of Praseodymium, Neodymium and Dysprosium oxide revenues could be in the order US$145M pa, although just demonstrates potential as a long way to go to get there
- Low market cap
- Solid management who are focussed on adding value to shareholders – rejecting a capital raising when the stock price was at 6 cents to wait for better value, also sold non-core uranium assets to support their focus on Skyfall
- Further resource work, trenching and diamond drill program to come

Cash at bank

At current expenditure levels ($200k in last quarter) SPX probably has enough cash to last another 9-12 months but no doubt would likely do a CR if prices rose materially. Note that management seem determined to wait for higher prices.

$632k at 30 June
+$180k tax rebate (if awarded) potentially in early October
+$300k from Uranium Equities upon grant of 2 outstanding exploration licenses
=~$1.1M

Quite happy to hold at these levels and am confident that greater value will eventually be achieved by management.

Cheers,

sbc