Ferro-Alloy Resources' target value has been left unchanged by house broker Shore Capital after its latest production update.
The Kazakhstan-based miner reported lower output quarter-on-quarter from its small processing operation due to severe flooding in the country.
Shorecap’s gross target of 81p however is based on a £601 million value attributable to the huge Balasausqandiq vanadium project, which assumes steady state production of 22.4Kt vanadium pentoxide by 2030, adjusted for a 60% discount for execution and financing uncertainties to give a risk-adjusted value of 33p per share.
“While vanadium prices (China V2O5 98% flake) have fallen to US$5.0/lb, we expect the falling trend to stabilise and reverse," the broker said.
“Despite weaker demand in the Chinese construction market, we expect increased demand over the long-term due to increased installations of vanadium flow batteries.”
Shares were unchanged at 4.95p.