The US bank Stifel has repeated its 'buy' and 40p target for shares in Rainbow Rare Earths Ltd, which earlier Wednesday upgraded the resource at Phalaborwa, South Africa, by 15%, adding two years to the project life.
Total measured, indicated and inferred resources now stand at 35 million tonnes at 0.44% TREO [rare earths], with a near doubling in the material now classified as measured.
Light rare earth elements neodymium (Nd) and praseodymium ("Pd") represent 29% and the heavy REEs dysprosium (Dy) and terbium (Tb) represent 1% and 0.3% respectively.
Rainbow added the resource also included even rarer elements in the SEG group (samarium, europium and gadolinium), lanthanum (La) and cerium (Ce).
Based on current spot prices for a TREO basket, Rainbow said the resource has an in-situ metal oxide value of US$3.7 billion.
Stifel told investors it had increased its assumption for the mineable resources from 27.5 million tonnes to 32.5Mt, increasing the net asset value by 6% "at our base case commodity prices or 4% at spot".
"We continue to expect the forthcoming feasibility study and visibility on basket pricing to drive near-term performance," it added.
The shares were up 1% in afternoon trading at 10p, which is a steep discount to Stifel's 40p valuation.