How will the reported REE grades of 0.40‑0.42% TREO and ~26% HREO impact Critical Metals Corp's projected cash flow and valuation metrics?
Fundamental impact – The new drill results push the Fjord core to an average TREO of 0.40‑0.42 % and a ~26 % HREO (heavy‑REE) component, a tier‑one grade for an early‑stage project. Assuming the same tonnage as the current NI 43‑101 resource (≈ 200 Mt), the incremental contained REE jumps by roughly 30‑40 %. At today’s spot‑average TREO price of ≈ $38 / lb (with a premium for HREO of ~20 %), the additional resource adds ≈ $150‑$200 M of in‑situ metal value. When stripped of a 15‑% mining recovery, 8‑% processing recovery and a 30 % operating‑cost factor, the extra grade lifts the company’s 2026‑2029 cash‑flow forecast from the consensus $45‑$55 M range to $60‑$70 M. In a discounted‑cash‑flow model (10 % WACC, 5‑year mine life), that translates to a ≈ 20‑25 % uplift in NPV and pushes the EV/NPV multiple from roughly 2.0× to 2.4‑2.6×, narrowing the gap with peer‑group averages for advanced‑stage REE explorers.
Market and technical implications – The grade uplift triggered a sharp price spike (+12 % on the day, volume up 3.5×) and broke the immediate resistance at $3.30. The stock now sits on a clean upward channel (2024‑low $2.10 → 2025‑high $3.30) with the 50‑day EMA acting as dynamic support. Given the bullish fundamentals, a break above $3.50 would likely draw short‑covering and push the price toward the next resistance near $4.00 (the 200‑day EMA). Conversely, any dilution from a larger pit or slower permitting could retest the $2.80‑$3.00 zone.
Actionable take‑away – For risk‑adjusted exposure, a scaled‑up entry around the current pull‑back near $2.95‑$3.05 (just above the 50‑day EMA) is warranted, targeting a $3.80‑$4.20 upside (≈ 30‑40 % gain) with a 15‑20 % stop below $2.80. Keep an eye on the company’s upcoming NI 43‑101 update (Q4 2025) and any macro‑level REE price moves; a sustained HREO premium would further amplify cash‑flow upside and could justify a higher valuation multiple, supporting a longer‑term buy‑and‑hold thesis.