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TREK METALS

RESEARCH

Trek Metals Ltd (TKM) Initiation of Coverage

Rawson Lewis

Key Points

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  1. Hendeka Manganese not valued in Trek share price

  2. Trek priced on Lithium as Lithium juniors rebound

  3. The junior Lithium stocks have seen their share prices fall to half their September 2022 levels on the back of the falling Lithium price.

  4. The Lithium price is up 30% from its April 2023 lows

  5. Junior Lithium plays, including Trek, are on the rebound

  6. Lithium drilling to drive Trek re-rating

  7. Spodumene Lithium explorers which have reported drill intersections of 1% Li20 currently trade at an Enterprise Value of between A$38M and over A$61M (Trek EV is A$26M) on current comparisons which are likely to appreciate.

  8. The size of any Trek re-rating will depend on drilling success.

  9. If Trek can report a Resource, it will fall into a peer group with EVs of A$300-400/t LCE or A$66M to A$412M.

  10. Lithium and Manganese both essential to batteries

  11. Lithium Manganese chemistries appear to be strongly preferred for the high-performance Electric Vehicle market.

  12. Trek has a Resource of 11.3Mt @ 15% Manganese worth between A$5-10M today.

  13. Peer valuation supports our price target of 25cps

  14. Trek is fairly valued at 8cps on its Lithium alone, and has upside to 13.7cps if Manganese is included.

  15. If Lithium drilling is positive, we expect TKM will trade at 15-35cps

  16. Please feel free to contact Mike Harrowell on mrh@rawsonlewis.com if you have any questions relating to the report.

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