Direct Nickel Limited (DNi), in which Regency has a 7.5% stake, and which it is joint ventured with on the Mambare nickel-cobalt project in Papua New Guinea, is close to completing a validation report on the nickel laterite treatment process at its test plant in Australia.
The broker notes a positive outcome could spark interest from major industry players - seeking both to particpate in the immediate opportunity and Regency's rights to additional licensing - and ultimately lead to a revaluation of world class prospects.
"This could be transformational for a share price that, seemingly, discounts this scenario down to zero and currently reflects less than the sum-of-parts of the group’s remaining quoted investments and participations," reckons analyst Barry Gibb.
He also highlights that the Mambare plateau is shaping up to be a world class project and expects nickel's supply-demand dynamics to swing back in favour of producers within the next five years.
Completion of the report on the pilot programme will enable DNi to move ahead with its partnership with Indonesian PT Antam towards feasibility and construction of the first commercial plant running the DNi process.
Beaufort gives a punchy price target of 1.5p and a "speculative buy" rating. Regency shares are up 11.96% at 0.515p.