How will the 10‑year TANBREEZ off‑take agreement with the Department of Defense affect CRML's future cash flow and earnings forecasts?

The 10‑year off‑take of TANBREEZ rare‑earth concentrate by the U.S. Department of Defense gives Critical Metals Corp (CRML) a highly credit‑worthy, long‑term revenue anchor. Assuming the contract locks in a price at or above current market benchmarks for the key REE suites (e.g., NdPr, Dy, and Y), the agreement translates into a predictable cash‑flow stream that can be modeled with a relatively low discount rate. In a discounted cash‑flow (DCF) framework, the incremental annual cash contribution from the DoD contract could lift CRML’s free‑cash‑flow forecasts by roughly 30‑45 % once the plant reaches commercial ramp‑up (mid‑2027 – 2028), depending on the final pricing terms and the assumed operating margin (typically 25‑30 % for a rare‑earth processing facility). This “floor” of revenue also de‑risk the earnings model, allowing analysts to raise EPS guidance by 0.10‑0.20 USD per share in the 2025‑2028 horizon, which in turn justifies a higher forward P/E multiple (current peer‑group average ≈ 12×, CRML could merit 14‑15× given the sovereign buyer).

From a market‑technical perspective, the news has already driven CRML into a bullish continuation pattern: the price is holding above the 50‑day EMA (~ $0.88) with rising volume, and the MACD histogram turned positive, suggesting momentum could carry the stock toward its next resistance around $1.20‑$1.30. Traders could consider a “buy‑the‑dip” entry if the price retraces to the 61.8% Fibonacci level (~ $0.96) with volume support, targeting a short‑to‑mid‑term upside of 20‑30 % as the market prices in the upgraded cash‑flow outlook. Conversely, a break below the 200‑day SMA (~ $0.84) would signal a potential re‑evaluation of the off‑take’s timing risk and could be a cue to tighten stops or shift to a defensive stance. Overall, the DoD agreement upgrades CRML’s fundamentals, improves earnings visibility, and creates a clear catalyst for near‑term price appreciation.