FROM THE BROKING DESK
As hinted at earlier this week, Jim Taylor has put out KEFI Minerals (LON:KEFI) — Tulu Kapi Development Update, 1 November 2017. KEFI is now set to develop the Tulu Kapi Gold Project in Ethiopia with a throughput 25% above that used in the updated DFS of May 2017. This will raise average production over the first three years of the project’s life from 115,000oz pa to 144,000oz pa and increase the flexibility to switch between selective and bulk mining.
We reiterated our Buy rating and revised our target price down from 9.0p to 8.0p. We adjusted our model to reflect the current finance structure. We’ve assumed that the company will raise US$25m in equity at a price of £0.05/share, resulting in the issuance of 383m shares, equivalent to 115% of the outstanding share capital.
Jim really has been busy — he released this last week: Mineral Sands — Shifting Up A Gear, October 2017. This 76-page tome has a detailed looked at the mineral sands space, a small — but significant — part of the mining sector. Over the past 18 months the industry has moved through an inflexion point, creating an extremely favourable outlook. Product prices have risen, reflecting stronger housing and construction markets, particularly in developing regions, robust demand for paints and plastics and positive end markets for zircon.
Further positive factors include the draw-down of previously-built inventories, production outages and some capacity cutbacks in China. The space is also benefiting from industry consolidation and producer supply discipline. The medium- and longer-term outlooks for prices of both titanium feedstock and zircon are positive, with robust demand expected and limited new supply on the horizon. In the piece we have full reports on six companies: Iluka Resources, Base Resources*†, Kenmare Resources, Mineral Deposits, MZI Resources and Sheffield Resources