Core Thesis - Ramaco Resources, Inc. is facing skepticism regarding its rare-earth ambitions, particularly in scandium oxide, which is projected to generate over US$500 million in EBITDA by 2028, despite the current coal business providing steady cash flow [2][4] Financial Projections - The company's model anticipates scandium oxide sales at US$3,750/kg with annual production of 179 tons, leading to projected revenues of US$611 million, which are deemed unrealistic given the global market conditions [3] - Current market prices for scandium are around US$600–700/kg, with total annual production under 40 tons, suggesting that Ramaco's revenue projections are significantly inflated [3] Operational Status - The rare-earth project is still in the pilot stage, lacking current output or revenue diversification beyond coal, and there are no binding customer contracts or significant government funding to support the ambitious projections [2][3] - The full-scale facility for the mine is years away, and any deviations in price or yield could drastically reduce projected returns [4] Valuation Insights - Ramaco's coal operations generated Q3 2025 revenue of US$121 million and adjusted EBITDA of US$8.4 million, with a standalone coal valuation estimated at US$12–15 per share, plus an additional US$8–10 for the rare-earth venture [4] - The fair value of the stock is suggested to be between US$20–25 per share, contrasting with current market prices that may overstate speculative upside [4] Market Performance - The stock price of Ramaco Resources has appreciated approximately 4% since previous bullish coverage, indicating some realization of the growth trajectory and rare-earth optionality, but valuation risks remain due to unrealistic assumptions about scandium [5]

Core Insights - Australia's Sunrise Energy Metals has granted Lockheed Martin an option to purchase up to 15 tonnes of scandium oxide over a five-year period [1] Company Summary - Sunrise Energy Metals is focusing on the production of scandium oxide, which is a critical material for various applications, including defense [1] - Lockheed Martin, a U.S. defense contractor, is interested in securing a supply of scandium oxide, indicating potential demand in the defense sector [1]

Core Viewpoint - Scandium International Mining Corp. has received a mining license for its Nyngan Scandium Project in New South Wales, marking a significant milestone after a nine-year application process [1][2][3] Group 1: Project Development - The grant of Mining Lease No 1893 provides regulatory certainty for advancing strategic partnerships, offtake contracts, and financing for the project [2] - The mining lease is valid for an initial term of 21 years until October 2046, allowing the operator to apply for renewal [5] - The Nyngan Scandium Project is designed as a small surface mining operation, with an annual recovery of approximately 75,000 tons of limonite ore [7] Group 2: Market Context - There is a growing demand for scandium, classified as a critical mineral by several governments, and the project aims to supply this demand outside of China and Russia [4][6] - The project is positioned to become the world's first primary scandium-mining project, enhancing New South Wales' potential as a leader in sustainable mining of critical minerals [6][8] Group 3: Technical Aspects - The average limonite scandium head grade is 409 ppm, with a projected output of approximately 38,500 kg of scandium oxide per year, grading 98 to 99.9% Sc2O3 [7] - The project development includes a one-year construction period followed by a 24-month ramp-up to reach full capacity [7]

Core Viewpoint - The US Defense Logistics Agency (DLA) plans to purchase up to $40 million worth of scandium oxide from Rio Tinto over the next five years to enhance the US defense stockpile, aiming to secure a stable supply of this critical rare earth element following China's export controls [1][3]. Group 1: Acquisition Details - The DLA intends to acquire 6.4 tonnes of scandium oxide over five years, starting with nearly 2 tonnes in the first year, which represents about 5% of the global scandium oxide production of 40 tonnes last year [2]. - The current production capacity for scandium oxide is 80 tonnes, indicating a significant reliance on global supply chains [2]. Group 2: Supply Chain Context - China's export controls on scandium, imposed in late 2024, have constrained the supply chain, prompting the DLA's acquisition strategy for the National Defence Stockpile [3]. - Rio Tinto has been identified as the only vendor capable of meeting the government's product needs at the required capacity [3]. Group 3: Domestic Production Efforts - Rio Tinto is collaborating with the US Government to identify opportunities to increase domestic production and strengthen supply chains for the US market [4]. - In August, the US awarded up to $10 million to Elk Creek Resources to bolster domestic sources, highlighting ongoing efforts to reduce reliance on foreign materials [4]. Group 4: Technological Advancements - Rio Tinto achieved a breakthrough in 2020 by developing a method to extract high-purity scandium oxide from waste streams during titanium dioxide production, which eliminates the need for additional mining [5]. - The Canadian facility in Quebec has an annual production capacity of 3 tonnes of scandium oxide, indicating potential for increased domestic supply [5]. Group 5: Financial Implications - Rio Tinto announced gross costs of up to $300 million due to US tariffs on its primary aluminium exports from Canada during the first half of 2025, which may impact its financial performance [6].