Rare Earth Minerals - Lithium-Fuelled


Rare Earth Minerals Logo

Rare Earth Minerals (LSE:REM) has been one of the success stories of AIM over the past year with the share price having lifted off from lows around 0.05p to 1.8p presently - a performance that has stunningly outperformed the wider mining market. That has materialised as a result of acquiring interests in rare earth projects in both Greenland and Australia, but primarily as a result of progressing lithium deposits in Mexico - that is now the company's flagship asset. Rare Earth is up over 200% over the past six months alone as increased news flow has filtered through to improved investor sentiment, but is that share price rise a fair reflection of the company's assets? Rare Earth (abbreviated as REM from here on) has 5.45 billion shares in issue, which means the company is valued by the market at £98.2m.

As with companies that have a fast moving share price, it is essential to look at both the long-term picture and also the very short-term picture. As per the chart above, REM exited a period of strong consolidation in H1 2014 and that led to a rapid move to the upside catalysed by increasing news flow and sentiment. Having then consolidated yet again below 1p, the share price broke out to the upside and formed a further 100% extension that took the price up to circa 2p last week. However, as per the smaller chart, the shares repelled 2p on their first attempt and rapidly fell to nearly 1.7p, before consolidating around 1.8p. That fall from 2p suggests that there are a large number of traders in REM who saw the failure to reach 2p and downside breakout as a bearish signal. The consolidation pattern formed around 1.8p looks bearish with both lower highs and lower lows. However, as is clear with REM, there are a large number of news releases that are capable of changing sentiment in a flash. 2p is likely to form strong resistance, and resistance that is even stronger than that at 1p. The RSI is particularly high, which hints that a re-trace is likely (even if just part of further consolidation). The MACD is also high, as are volumes. An initial target is around 1.25p-1.30p.

A large percentage of shares are held in broker nominee accounts due to REMs popularity, although it is surprising to see that total directors' interests in REM shares is low in real cash terms. That said, in March, the Chairman and CEO bought circa £45,000 of shares in the market at 0.45p. Not much can be read into that given the size of the purchase, given the salary that chairman David Lenigas receives and given that 100m shares options were issued to directors in May at 0.48p with a life span of 6 years. That is poor practice in my opinion. The options were excessive, vested immediately, and had a long life span, plus were issued at the mid-market price. However, the purchase of shares by directors was still a positive sign at the time. That positivity is now limited given how much further the share price has advanced. The last placing was for £4.6m gross and was completed in February at 0.4p/share.

Over to the assets. REM is something of a unique situation within the AIM market in that its core asset focuses upon the extraction of lithium, a metal. Lithium is a metal with a promising future as an increased number of uses is likely to lead to rises in market demand - the price of lithium has risen along with economic growth since 2000, trebling along the way. In particular, there is an increasing focus on the use of lithium to create lithium-ion batteries, which are potentially the future for laptops (and other portable electronic devices) along with electric vehicles. These batteries hold a number of advantages over contemporary batteries although use in the past has been limited by several scientific and economic factors. Current uses for lithium include in batteries (to a lesser extent than is expected in the future), greases and glass applications.

One of the key focal points over the past year has been plans from US based Tesla motors to construct a $5 billion 'giga-factory' for lithium-ion batteries in order to drive an electric vehicle revolution. That factory alone could consume the current global production of lithium supply and yet still only caters for a small portion of the prospective car market. Of course, this is premised upon the assumption that lithium-ion batteries are the way forward. There are still numerous challenges, and there are significant technological and market acceptance hurdles. The continuing innovation of batteries is perhaps the biggest risk to the lithium-ion story with competition from hydrogen fuel cells and other sources. Nevertheless, the future remains bright as it stands, and demand is expected to increase. The forecasts for the price impact are somewhat sketchy, especially since lithium is not traded on a global market - rather, prices are decided on a contract-by-contract basis dependent upon the quality of lithium involved and numerous other factors. Lithium is actually a relatively abundant material, but economics is the sticking point. Many deposits are uneconomical, but it is likely that any further price rises will spur the supply side into further activity. That has already been the case, especially with the Tesla announcement - the factory is expected to be in production in 2017 so there will be a 3-year waiting period.

Tesla actually benefits from lower lithium prices (hence lower vehicle prices that are more competitive), so this could have been part of their announcement strategy. Dependent upon the forecasts observed, lithium prices are either expected to tread water for the next few years, or increase steadily towards $8,000 per tonne of battery-grade lithium carbonate. Currently the bulk of production is from just a few large companies (there is effectively an oligopoly). There will also be an increasing focus upon quality. Battery grade lithium (99.5% LC) currently attracts a significantly lower price than EV grade (99.9% LC) and EV plus grade (99.99%). The three figures are roughly $6,500/t, $8,500/t and $12,500/t respectively. Most existing companies do not have the ability to produce the latter two grades.

Lithium comes in three main forms: in brines, in hard rock, or in clays. Clays and brines are the cheapest to develop, with hard rock deposits generally having higher OPEX levels. The lowest cost areas are currently in the 'lithium triangle', which encompasses Bolivia, Chile and Argentina. REM's project area is a low-cost clay deposit located in Mexico. Whilst there are two very early stage side projects in Australia and Greenland, the market is attributing the significant majority of value to Mexico currently, so I'll cover those last. In total, REM has the following assets/operations:

- 12.14% of Bacanora Minerals (BCN:CN)
- 2.2% of Western Lithium (WLC:CN)
- 30% direct interest in the Fleur-El Sauz lithium project (option to increase to 49.9% through discussions)
- 30% direct interest in the Megalit lithium project area
- 100% working interest in four Greenland rare earth exploration deposits
- 30% free carry interest in the Yangibana rare earth project in Australia

Bacanora Minerals is actually the company that REM is partnered with at Fleur-El Sauz and Megalit. Importantly, it is relatively easy to put a valuation on the first two investments that REM has. Since both companies are listed on stock exchanges, we can use their market caps to derive a valuation as it is simply an investment and does not yet give REM any access to their underlying resources, which include the promising La Ventana lithium area and a borate project. Bacanora's market cap has risen over the past few months as a result of REM buying its stake, but also positive connotations from REM's favourable sentiment. At present, it has a market cap of £38.3m, so REMs stake is simply valued at circa £4.65m. Bacanora is planning a listing on AIM that is likely to start very positively given REM's price action to date. In addition, Bacanora has been lightly traded in Canada, which has prevented any real share price traction.

The placing implied market cap is expected to be £25.8m, but there will almost certainly be a material price uplift upon listing, especially since the Canadian valuation is higher. However, there could be sellers into the listing given the raising of cash, plus given that REM are not going to be locked-in to their shares. In fact, their chairman Colin Orr-Ewing will trim his direct interest during the IPO. Admission to trading on AIM is expected in late July, and as noted, is likely to be positive despite weak mining market sentiment. As an example scenario, if Bacanora's market cap rises to £75m post-listing, then at 12.14%, REM's stake is worth £9.1m. It is however probable that REM will continue to increase its market cap heading towards the listing in seek of a larger return. If REM seeks to dispose of its shares once listed, that could create downward pressure, but that is unlikely to be the end game for Rare Earth Minerals, so the canadian market cap is more useful for referencing a value for REMs stake at the moment.

REM's stake in Western Lithium is currently valued at around £650,000 - that is not very material to the market cap.

Bacanora has two assets that REM is not directly interested in: a borate project and the La Ventana lithium deposit. The La Ventana deposit is located very close to REM's two direct interests in the Megalit and Fleur-El Sauz areas, hence there is plenty of geological read-across. That is where the main point of positivity is derived from. In the past Bacanora completed both drilling and a preliminary economic assessment (PEA) on La Ventana, which unveiled a high quality, low CAPEX, high LOM, high IRR of 138% and low OPEX potential operation. That would essentially be an operation that 'ticks the right boxes', and would be world class given the numbers involved. In particular, the high IRR is of particular interest and means the deposit boasts a favourable economic scenario. That said, it was only a PEA and these are subject to extreme revisions once more details are added through in-depth studies. Indeed, there have already been numerous important changes since that PEA. Positively, the inferred resource has been converted to indicated. Negatively there has been a change on Mexican legislation that has led to a new 7.5% mining royalty being introduced, which will impact upon economic returns, albeit they will still stay very high.

Thus it is important to recognise that PEA's are not given a high level of credibility in the current mining market - there are too many variable factors and the study is often not in-depth enough compared to DFS' or BFS'. Therefore, despite La Ventana's very high net present value of over $800m, these figures are rarely ever remotely reflected in market caps. As an example in the oil sector, Rose Petroleum supposedly has assets with a NRI NPV of $1.43bn with rates of return of 125% and 96% respectively, yet Rose is valued at £40.2m. That is just one example of the often huge disparities between net present values and market caps - all too often have mining companies with net present values failed to access funding or even get slightly close to fulfilling their assets' potential. Arguably though, that is more likely for Bacanora (thus REM) compared to companies in the past, given the likely excellent economics of the project.

As noted, REM has a direct 30% non-operating interest in Fleur-El Sauz, which is located South of the La Ventana deposit. Although it has the option to increase its interest to 49.9% through discussions with Bacanora (by the end of September), there is no disclosed figure for how much that would cost, so we have to use the 30% figure for now. In June, REM and Bacanora upgraded their resource base at Fleur-El Sauz ('FES' from here) using two zones: the upper clay and the lower clay. The resource was upgraded in both size and confidence, from inferred to indicated with the size net to REM rising to 603,000 LCE (equivalent to around 244,000 Li2O). FES has favourable geology in that it is relatively simply and a series of 'repeating structures'. The resource is shallow and also has a fairly consistent pattern of grades albeit there is a 'distinct zone' of high-grade lithium in the North part of El Sauz and through the Southern part of Fleur. There is no firm resource on the Megalit area (which surrounds FES) at the moment since it is a relatively new joint venture although the company has commented that if it does repeat along strike as per FES, then it could contain a multi-million LCE resource. That is a significant area of value creation for the future, but it cannot confidently be included in any current valuation until more details are known.

One of the most significant recent milestones was the confirmed ability by REM to produce battery quality grades (99.5%). Aside from this it's therefore worth comparing REMs lithium resource to other players in the market on a resource size basis. That is shown in the table below (click to enlarge).

Due to the highly complex nature of the figures, accuracy cannot be guaranteed
As per the table, REM has an estimated adjusted market cap (market cap minus cash/receivables etc.) of circa £88.6m. Whilst the list is by no means exhaustive, it shows how REMs operations stack-up on a size basis versus other projects and the EAMCs of those companies. Since proven and probable reserves are more valuable than just measured and indicated resources and even more valuable than inferred resources, it is relatively clear to see that there are several companies with more favourable resource bases, based on size. Bacanora and REM both have large resources, but they are in the indicated categories hence have had less work and studies completed on them and the intrinsic value is lower. That can of course be changed through further work such as metallurgical testing and economic assessments, but whilst the resource remains 'indicated', the resources of REM do not appear to stack up favourably. Indeed, there are numerous companies with far lower EAMCs with respectable resources.

That is confirmed through setting up a different comparison using similar figures and a categorisation system. As shown by the table on the right, there are two added columns. The second column is the BEPR - this uses the categorisation shown at the top. 1 tonne of measured Li2O is given a value of 1, whereas the indicated resource shown in the previous table has been divided by 2.5 and inferred resources divided by 4. That reflects the uncertainty associated with indicated and inferred resources and gives greater weighting to measured resources. In addition, those tonnes of measured/indicated that are proven/probable carry twice as much weight due to the assessed economic viability; hence the number of tonnes is doubled. As stated, this provides a weighting system to compare the companies on.

The BEPR for REM is respectable at 87,445, but that reflects that most of the resource is still only classified as 'indicated' and that there are still hurdles and test work to be done in order to convert the resource into higher confidence categories and closer towards economic viability. Once again, that is where value can be added in the future. The third column deals with a valuation method whereby the EAMC is divided by the BEPR. The lower the resultant figure, the better, as it reflects an investor having to pay less cash per BEPR. Compared to all other companies, REM has an extremely high EAMC/BEPR, and even more so compared to RB Energy, which is starting to enter commercial production. The outliers have notes attached, which help explain the anomalous valuations. Compared to Bacanora minerals, REM is very overvalued. Indeed, I have included three separate scenarios to highlight that. The second scenario assumes that Bacanora's valuation rises to £80m post AIM listing. The third scenario generously assumes that REMs other rare earth projects are worth £20m, despite their very early stage of development. Even factoring those two scenarios in, REM continues to look extremely highly valued compared to all peers. Indeed, whilst REM could grow into its current valuation in the coming years through Megalit and resource upgrades, it is likely that the current valuation is too high to be sustained (ceteris paribus). Bacanora itself proves that, and it's the scale of value misalignment that is potentially a worry.

As alluded to, that list it by no means exhaustive. For example, TSX listed Lithium Americas is partnered with POSCO and has a project called Cauchari-Olaroz in Argentina. It's commented as being the third largest brine project in the world. Next to very good infrastructure, it is touted to have a possible 40-year LOM and have measured and indicated resources of 4.7MT Li2O. Within that, 1.1MT is proven and probable. The project also has a base case NPV of $738m pre-tax, yet the company minus cash is valued at less than £15m. This shows that there are numerous highly credible projects available at far lower valuations.

Of course, resource size does not cover every aspect of a project's attractiveness, as CAPEX, OPEX and grades are all notable considerations. Of those, OPEX is key too, and helps to understand why the company and Bacanora should attract premium valuations. Given the clay deposit, and taking into account various factors, projected OPEX costs for the resource are just under $2000/t LCE. In addition, that is before any by-product credits as those revenue avenues are still being interpreted. It is expected that the figure could be brought down further through working in grade improvements. That figure is very attractive compared to a lot of projects, and reflects the advantages of working with clay/brine versus hard rock. Therefore, a premium valuation for the indicated resource makes sense, but it still does not justify the huge premium that REM benefits from, even versus Bacanora.

Taking a look across other peers, the OPEX levels compare well. Galaxy Resources' previous DFS suggested OPEX of $2200/t and Nemaska's is circa $4000/t. Reed expects a high IRR, low CAPEX operation with OPEX around $4,500, although the end product is high quality and payback is just two years. Critical suggested $2,650/t net of credit with RB Energy at circa $3,200/t Li2CO3. However, numerous companies do also have low OPEXs suggested. Western Lithium has touted $968/t LCE after credits at optimal levels, Orocobre suggests levels around $1,230 post-potash output and Rodinia Lithium suggests $1,519/t at optimum levels. Indeed, the company has noted that Western Lithium's King's Valley project has many similarities to Sonora. Lithium Americas also suggest net cash operating costs of $1,332/t when accounting for potash, with Lithium1 around $1,540/t. There is plenty of scope for sector acquisitions at attractive prices should REM choose to move in that direction, but at the same time it emphasises that there are clearly cheaper entry points into lithium plays and Bacanora is a much cheaper entry into the same lithium play. The low expected FES OPEX is an obvious positive though and should be a point of attraction for any interest parties further down the line.

However, REM is valued at twice the market cap of Bacanora alone, yet Bacanora has a larger lithium resource and arguably one that it more developed (La Ventana). In addition, Bacanora has operatorship, which gives it greater discretion over spending and means it has the lead role in the joint venture (plus it's easy to overlook the borate project). Therefore, it may actually be the case that the Bacanora listing on AIM does more harm them good. It is highly likely that investors would choose Bacanora over REM for lithium exposure (currently), and given the differences in valuations, it could well put pressure on REMs market cap, which would be counter-productive. Of course, the level of success that Bacanora has upon listing will be interesting to see, and it would also be interesting to see how REM manage their stake.

The rare earth projects are unlikely to be a deciding factor for investors who have re-rated the company on the lithium potential, especially since Bacanora have the borate project as well. Nonetheless, the rare earth projects deserve a mention as they could contribute to a future valuation, albeit at present they are too early stage to confidently assign a value to. The Greenland licences are located close to the very high quality Kvanefjeld project area that is estimated to have a total resource inventory of 956MT including U3O8, TREOs, zinc and yttrium oxide. The Australian project (Yangibana) has also had limited work done, albeit it has meaningful exploration upside for TREOs in particular.
The Tesla Roadster - an EV

To REMs credit, they have sufficient cash moving forward as a result of the February placing and a $10m debt facility at a 10% coupon. That does appear to be a slightly odd move given that it obviously needs to be repaid down the line, but the company should be able to cater for that adequately. Chairman David Lenigas suggested that the proceeds could be used for acquisitions, and with the mining market depressed, there is lots of scope to acquire attractive assets at respectable prices

In essence, it would appear that REM is significantly overvalued at the current point in time on a peer-to-peer basis, and that tallies with the sharp uplift in share price. The indicated resource is highly promising, as is Megalit, but the market appears to be valuing REM at a vast premium to comparators, but also at a large premium to Bacanora who are their partners with a larger resource. That disparity will could adjust once Bacanora lists on AIM as it provides a reference for REM shareholders, who may well transfer over to Bacanora upon listing. There remains much work to be done at FES in terms of economic studies and securing clear access to mining requirements such as water and power. There is plenty of potential for REM to grow into its valuation over time (and exceed it), through the conversion of the existing resource to more valuable categories, through acquisitions of other assets, and through the further proving of an economic project at FES (which could include successful by-product analysis). Additional drilling at Megalit and partnerships/MOUs for FES are other potential catalysts. Despite that, at the current market cap, REMs valuation looks stretched and the Bacanora listing in a fortnight could possibly have the opposite effect to that desired. I have therefore put a medium-term Sell tag on Rare Earth Minerals at 1.8p.

UPDATE (17/07/14) - Rare Earth Minerals hit the target 1.25p - 1.30p range this morning far earlier than anticipated - the sharpness of the price fall looks relatively extreme, thus was perhaps unwarranted but I have moved REM to a No Rating tag at 1.285p. Indeed, the market cap has now corrected to around £70m, and whilst that still looks unfavourable comparable to peers, it is likely to be more aligned to Bacanora post-listing. Therefore, the impact of the Bacanora listing is no longer as clear cut as it previously was, and the key catalyst for a retracement has perhaps been removed. An announcement by a chemicals major to acquire Rockwood Holdings is likely to keep the sector buoyant, and is a positive signal. Given how fast the share price has fallen, it makes sense to remove REM from a sell tag since the chances of a bounce from around 1.20p - 1.25p are fairly high.


  1. Hello. Thank you for this piece. I hold rem and differ on a few points because i think the market needs to value the future now. lithium is the future. whats the point in waiting. but i agree that it is heavy rated and bacanora is much better. the placing in bacanora at a low level too. a bit concerning. this is not lithium fuelled. its lenigas fuelled who seems to hype everything. I dont likethe man one bit. I wish it was some one else


  2. Well researched contrarian view. I dumped 40% of my holding from 0.93p onfriday at 1.9p because I became *Disillusioned* with the allowance of the option for fleur to be extended. If the asset was so perfect I would revoke the right and keep it for myself!

    The indicated stage of resource is early so i think you are right to use a 2.5 to one factor against measured.

    All to play for but *not* great value at this price. I hope for a tesla takeover but that is hopes and *dreams*. On the winding road we continue. Up down up down. I will slide some across to Bacanora when they list but not for a market price of £50m and above. Stay low baccynora cos I want a bargain. Richard

  3. David says that the bedt thing about rem is that its an investment company. I think that is one of the worst things. It has no desire factor and it might as well be a fund. Shareholders have detached from reality as Rare is not worth billions and its not worth 50p a share. It barely paid anything to get the lcences. Pumped, now where is the dump.

    1. Coming to the forums courtesy of the likes of yourself, loudly yelling 'dump!' no doubt.

      Don't worry we'll be ready for you.

  4. But what if rem is worth £300m in 5 years time. Is that not what matters?

    1. How many projects fail :0|! This is valued at more than Inland Homes for petes sake :0|! Inlan provides real jobs with real revenues and real profits. its a crazy world :0|!

      P.s. Please look at vectura :0)

  5. Fab analysis as usual. I think the decision to keep it at 50% for now is very prudent. We all know lenigas can shock the market but this valuation cant and wont last for ever., no matter how many rnses are released. Unfortunately I think too mant have got caught up in speculation. Rem could be worth this in 2 years but expensive NOW and that is what I care about


    1. Lets see who is right.

      David Lenigas seems to have a different view!

      ...''Getting very excited about the prospects of BCN getting its AIM listing. Come on fellas. Get your act sorted. Game changer for REM I feel.''

      ......''Do not under estimate the significance of Bacanora ' s news overnight. Their exchange have now approved. Great news.''

      .......''I would like to think that one day, Mexico could be the Saudi Arabia of Lithium. Got to keep drilling. Let's see!''

      ......''It is a truly outstanding GigaProject''

      .......''I shudder to think how many batteries can potentially come out of Sonora.''

      ........''A very large lithium project is now being scoped. Potentially one of the worlds biggest.''

      .......''This is just lithium. I am keen to see Phosphate and all the other goodies that could be worth more.''

      .........''Mexico…the best mining deal Ive done in 30 years.''

  6. Dear Author; research bets finger in the air every day of the week. Talking about $USD billions in market capitalisation is nonsense talk. I have visited Mexico before and wonder What is the landscapeis like for the lithium? Where is it located? I guess that if it is more than 50kilometers from the nearest city then there would be high water power snd gas access costs that could hamper how commercial the project really is. How comes that no major has picked up on this project before?

  7. Let's all deramp this as much as possible! It's a total no-hoper. Tsk, shame on you guys.

  8. The problem with trying to buy BCN is that they are only issuing a minuscule amount of shares on AIM. Only £4.75m worth.

  9. I dont know enough about REM but I know there are huge amounts of hectorite clays in asia that are untapped. If sonora is this good, then I would expect those to start being tapped by majors and there could even be a big supply glut? We are talking multiples of the current production here and demand is only forecast to double. That would put downward pressure on the lithium price which is what everyone wants so its a tricky business. Lots of clay near nevada and arizona too.

    Western lithium says they dont need blasting for their lithium but REM do? They also say Lithium also occurs in significant concentrations in the mineral hectorite, a trioctahedral smectite, which forms the Western Lithium hectorite clay deposit. It sounds like there hasnt been much impetus behind lithium but if there was then there would be a giant swathe of supply from non hard rock sources. Falling costs at brines also seem to be the future and that will just hit prices even more


    More peer companies. Pure Energy Minerals (less than £2m). Stria Lithium (less than £2.5m). Pilbara bought some hard rock lithium on the cheap too. Quebec lithium inc. The future might be brine because of the strip ratio and promised low costs.

  10. Great article El1te. Will be selling some of my REM shares tomorrow.

  11. I have a very different view of this share and I feel this review will come back to haunt you and any sellers will be looking to buy back at higher prices shortly imo...LGO was recommended as a sell at 2p and those that followed this advice missed out on a further 200% rise...REM I feel will do similar and D Lenigas says you have not spoken to him, therefore some research and facts missing..REM a buy for increase over 2p shortly.

  12. Hi there,

    Investors are welcome to have alternative opinions - it was my opinion that REM was overvalued and prone to fall at circa 1.8p, and I had an initial 1.25p-1.30p target that I expected to be reached over the medium term (3-6 months) barring no sudden and material change of fundamentals. The timescale for that target may well have been shortened with the past few days trading activity, but that remains to be seen.

    I moved LGO from Buy to No Rating at around 2p as I reckoned that was fair value. Indeed, I reckon that LGO is now overvalued, but sentiment remains strong, so high prices are being sustained. Since I had a Buy rating initiated just above 1p, it was a successful investment as far as I am concerned.

    I have not spoken to management as I trust my research more than the word of management in most cases. I form an opinion on a company, and then conduct interviews afterwards if they are willing to do so. Performing an interview with a company that I have put a Sell tag on is unlikely to add anything. I continually re-evaluate investments along their share price movements

    Good luck with REM

    1. Hi,

      Will you move rem from Sell to no rating at 1.3p if it reaches there soon?


    2. Yes - it is good practice to stick to initial targets. The sharpness of the drop over recent days has been greater than expected and may be related to the triggering of stop losses combined with a lack of news to support higher prices. However, the characteristic of the drop does often mean that a rapid rebound can occur.

      I would have expected the share price to retrace (as per the technicals indicated) and consolidate around the 1.6p level before perhaps drifting. That scenario will clearly not happen now, which means the investment dynamic has changed - the impact of the Bacanora listing is no longer as clear cut as it previously was as around 25% has been knocked off of REM's market capitalisation. There has actually be positive news on the lithium front with chemicals company Albemarle Group agreeing to purchase Rockwood Holdings who are a big player within the lithium products market - the value of the takeover is a valuable reference point even though there are many extra considerations to account for.

      In short, if REM does reach 1.25p-1.30p or near enough to that zone in the next few days, weeks or months, then I will most likely move it to No Rating (unless fundamentals change dramatically). It would still look relatively overvalued, but expectation does have to be priced in.


  13. I was digging around for a REM vs BCN valuation article and just found this - excellent analysis. Thanks!