ATOME PLC (AIM:ATOM) is set to see an acceleration of activity for the Villeta green fertiliser project, in Paraguay, as it advances towards final investment decision, that’s according to stockbroker SP Angel.
The broker, in a note, has repeated a ‘Buy’ with a 200p price target which implies substantial upside to the current market price of 32.4p.
It comes after ATOME this week announced the hiring of a key engineering contractor for the project, a move that de-risks and supports the anticipated project timeline.
“We expect activity in Paraguay to accelerate over the next few months as ATOME confirms an offtake agreement on the Phase 1 Villeta project, which should enable the completion of project financing and FID approval targeted by end-1H25,” SP Angel analyst David Mirzai said in a note.
“We expect the company to deliver several near-term valuation catalysts that will de-risk the Villeta development and its forecast stable cashflows, which should ease the market’s uncertainty and drive the share towards our 12-month target price.”
Mirzai highlighted the progress made by the management team including on project financing.
It includes proposals that see the debt proportion ‘substantially oversubscribed’, validating the project's relative commercial viability, and, the arrangement of a project level equity funding round.
Notably, that project-level funding equates to a $60 million valuation for ATOME’s remaining stake in the project – compared to the current £16 million market capitalisation on AIM.
ATOME chief executive Olivier Mussat, on Monday, told investors that ATOME is addressing significant existing and projected demand for greener fertilizer, and, Villeta is intended to be a ‘pathfinder’ project, with the ATOME team set to develop a wider pipeline of projects.