Texas Mineral Resources Corp (TMRC)

[aore]

We think this announcement helps validate our thesis regarding the potential value of Roundtop, and by extension,
our associated price target of Texas Mineral Resources Corp. By the way, it also validates the same vision
(valuation) that TMRC management has articulated as well.
Recall USA Rare Earth is TMRC’s investor/partner at Roundtop. In short, USA Rare Earth put up $13 million
and TMRC put up (ultimately) 80% of Roundtop. Doing some simple math, if the proposed IPO happens at a $1
billion valuation for USA Rare Earth, that means they are valuing 80% of Roundtop at $1 billion, which means
TMRC’s 20% of Roundtop would be valued at $250 million. If we adjust for outstanding dilutive instruments,
that will peg the value of TMRC’s shares (relative to the proposed IPO valuation) at somewhere between $3.50
and $4.00. Moreover, presumably, if people are buying a USA Rare Earth IPO at a $1 billion valuation, it is
because they expect it to be worth more than that in the future, which suggests that perhaps TMRC could be worth
more than that comparative valuation implies as well. To translate, we think our price target is reasonable.