IronRidge Resources' (LON:IRR) two projects in Gabon have the potential to host high grade iron discoveries, says house broker SP Angel, which has started coverage on the recent AIM float.
The company raised around £9.7mln in fresh capital through the IPO at 10p a share giving the firm a market value of around £23.7mln.
Funds raised will be targeted at drilling at both the firm's Tchibanga and Belinga projects with the former targeting 10,000 metres to obtain a first resource figure, notes analyst John Meyer.
An exploration budget of US$12.8mln has been set to conduct exploration at both Tchibanga and Belinga, he added.
The broker noted that international consultants SRK have assessed the value of the iron ore projects to be US$38.1mln or around £25mln based on a probability model on future cash flows at Tchibanga and Belinga.
SP Angel also noted that the depressed iron ore sector gives investors in the firm the chance to benefit from a recovery in prices in the medium term.