skip to content
  1. Home
  2. >
  3. Questions
  4. >
  5. RARE: Hi 5i, Came across this in the Daily Chase from BNN [Tactical Resources Corp.]
You can view 2 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi 5i,

Came across this in the Daily Chase from BNN:

"Tactical Resources Corp. plans to list on the Nasdaq stock market through a merger with a shell company. After the transaction, the combined firm will have an enterprise value of US$589 million. Founded in 2018, Tactical Resources explores and develops rare earth elements — a group of 17 metals essential for defence technology, electric vehicles and semiconductors. The company will use proceeds from the deal to finance construction of a processing facility at the Peak Project, a rare earth minerals mine near El Paso, Texas."

Any thoughts on the company from an investment standpoint would be appreciated.

Thank you!!
Asked by Brian on August 26, 2024
5i Research Answer:

This is a special purpose acquisition (SPAC) transaction, allowing Tactical to go public faster. Typically, SPACs do not work out well. We do not have a lot of current details. RARE has been a tiny unprofitable company to date. It released some good extraction numbers in 2022, and its project is considered OK. That being said, there is high risk here and a LOT of capital will still be needed. The sector has had its ups and down and is currently experiencing negative investor sentiment. Certainly a 'bigger' company will attract more interest, and allow better access to capital, but it all comes down to the robustness and economics of its Peak Project. Today, that is a big uncertainty and we would consider this too risky right now for serious consideration.