SP Angel argues that Beowulf Mining PLC (AIM:BEM) remains undervalued, with the broker pointing to progress at the company’s Kallak iron ore project as key to closing the gap between its £6m market capitalisation and its 182p net asset value target.
The group is working towards filing its environmental permit, a crucial step in advancing Kallak.
Field studies have been carried out over the summer, including surveys of the proposed transport corridor and assessments of reindeer and wildlife impacts along the Inlandsbanan rail route.
Beowulf has also kept up dialogue with local communities, which SP Angel highlights as important to de-risking the project.
On the technical front, pre-feasibility study work is moving forward. Initiatives include testing nitrogen-free explosives that could cut emissions by around 90%, trials of autonomous electric mining trucks to improve costs and flexibility, and developing cheaper crushing and grinding techniques with Chinese supplier LONGi.
Plans also extend to a concentrate pipeline to the railhead and new handling facilities at Narvik port.
SP Angel says management’s “meticulous approach to permitting via stakeholder engagement and environmental studies” should bring the project closer to financing.
The broker believes that further progress on permitting could help to close what it calls a “valuation disconnect” between Beowulf’s current share price and its assessed net asset value.
In afternoon trading, the shares were off 4% at 9.8p.