Harena Rare Earths shares jump on positive PFS
Harena Rare Earths (formerly Citius Resources) has seen its shares surge by 20% following the announcement of a positive pre-feasibility study (PFS) for its Ampasindava rare earth project in Madagascar. The PFS confirms the technical and economic viability of the ionic clay deposit, projecting a 20-year heap leach operation with an annual production capacity of 4,000 tonnes of total rare earth oxide (TREO), including 1,700 tonnes of critical magnetic rare earth oxides such as neodymium and praseodymium (NdPr) and dysprosium and terbium (DyTb). The study, conducted in collaboration with global engineering firm SGS, estimates pre-production capital costs at $142 million, which includes a 25% contingency for engineering, procurement, construction management (EPCM), and funding costs. The project, designed for a throughput of 5 million tonnes per annum at an average grade of 1,500 parts per million (ppm) TREO, demonstrates robust economics with a pre-tax net present value (NPV10) of $343.7 million and an internal rate of return (IRR) of 34%.
This announcement marks a significant milestone for Harena Rare Earths, which secured 100% ownership of the Ampasindava project in 2025. The company has previously highlighted its commitment to advancing this project through substantial investments in resource development and environmental programs. The completion of the PFS is seen as a pivotal step in the company's strategy to optimise the asset further as it transitions into the final piloting and studies phase. Executive Technical Director Allan Mulligan emphasised the project's world-class scale and the sustainable heap leach extraction model, which is expected to enhance local economies while mitigating environmental impacts. The inclusion of a Proof-of-Concept plant in 2026 is anticipated to facilitate a smoother transition into construction, thereby reducing startup risks.
From a financial perspective, Harena Rare Earths is positioned to leverage its recent advancements. The company’s balance sheet has been strengthened through previous capital raises, which have provided the necessary funding to support the PFS and upcoming phases of the project. The projected life-of-mine free cash flow of $1.0 billion post-tax indicates a solid revenue potential, particularly when considering the improved financial metrics under current consensus pricing scenarios, which could see the pre-tax NPV10 rise to $616.1 million and undiscounted life-of-mine free cash flow reach $2.6 billion post-tax. This financial outlook suggests that Harena is well-equipped to manage its planned expenditures and capital requirements as it progresses towards production.
In comparison to its peers in the rare earths sector, Harena Rare Earths is positioned competitively. Companies such as Lynas Rare Earths (ASX: LYC) and MP Materials Corp. (NYSE: MP) have established themselves as leaders in the market, with Lynas reporting a production capacity of approximately 5,000 tonnes of NdPr annually and MP Materials focusing on a vertically integrated supply chain. While Lynas has faced challenges related to regulatory compliance and operational costs, Harena’s projected capital costs of $142 million for the Ampasindava project appear favourable, particularly given the potential for high yield recoveries from its heap leach model. Furthermore, the IRR of 34% for Harena compares favourably with industry averages, positioning the company as an attractive investment opportunity in a sector that is increasingly critical to global supply chains.
The significance of this PFS for Harena Rare Earths cannot be overstated. The robust financial metrics and the strategic positioning of the Ampasindava project enhance the company's value creation pathway and de-risk its assets in a sector that is experiencing heightened demand for rare earth elements. As the world shifts towards clean energy technologies and electric vehicles, the critical nature of rare earths, particularly those produced by Harena, places the company in a favourable position relative to its peers. The anticipated cash flows and strong project economics could attract further investment, enabling Harena to solidify its standing in the rare earths market and potentially expand its operations in the future.