Ferro-Alloy Resources Ltd (LSE:FAR) (FAR) has got production back on track after sourcing additional concentrate from different suppliers, says house broker Shore Capital.
As such, FAR has now stockpiled sufficient material for seven months of production assuming current rates.
Management aims to increase production by treating different and higher-quality concentrates as they become available.
In 2023, overall secondary production rates were slightly higher but commodity prices for vanadium, molybdenum and nickel were significantly lower year-on-year.
“As such, we have adjusted our 2023 revenues to $5.7m from $6.9m," said the broker, which added Balasausqandiq remains the main driver of FAR’s equity valuation (c.98%),
A Balasausqandiq feasibility study is expected to be published in April.
ShoreCap values this asset risk-free at £601 million or 81p per share assuming it gets to 22.4kt vanadium pentoxide (V2O5) by 2030.
Currently, though, it is applying a risk discount of 60% to get to £240 million or 33p (previously 42p) per share.
Vanadium prices (China V2O5 98% flake) have fallen from recent highs of US$10.2/lb to US$6.0/lb, notes the broker, but remain in line with longer-term forecasts,