Nexus Minerals Ltd (ASX:NXM) has been initiated by Euroz Hartleys with a buy recommendation and a price target of 80 cents per share (current share price: 46 cents).
Euroz Hartleys’ valuation has been benchmarked against Nexus’ ASX listed gold exploration and development peers and sense-checked against direct peers in terms of its current stage of evolution.
Nexus offers ongoing and material news-flow over the short to medium term, according to Euroz Hartleys.
The following is an extract from the initiation report:
Key points
- Nexus Minerals (NXM) is run by geologist and executive Andy Tudor who has his name against King of the Hills and Bannockburn gold discoveries in WA, as well as multiple gold and porphyry copper discoveries in the Asia-Pacific. He is supported by a well respected and successful board, executive and technical team.
- NXM has three projects (Wallbrook, Pinnacles and Mt Celia) in the Eastern Goldfields, WA and one project (Bethanga) in Victoria.
- Wallbrook is the flagship project 100% owned, well located ~40 kilometres north of NST’s +5 million-ounce Carosue Dam Operation (CDO).
- Contains an emerging +50 kilometre 'gold trend positioned in-between two NST mining centres, with significant gold mineralisation already confirmed at Crusader-Templar, and further upside anticipated at Branches to the north.
- The mineralised gold corridor at Crusader-Templar spans +1.6 kilometres of strike (remains open) and displays a mineralised-style similar to that of Karari (CDO) – we conservatively see +1.5-2 million-ounce potential, and continue to be impressed by grade which appears to be improving at depth.
- A potential orebody of this significance has strategic value, especially even its close proximity to existing infrastructure (haul roads, mining and processing centres).
- The Crusader-Templar discovery alone underpins our $0.80/sh price target – with little to no consideration given for the other exploration projects or resources (which provide additional upside).
- We initiate with a BUY recommendation and a Price Target of $0.80/share. This is based on the back of the envelop risked development scenario, sense checked against peer EV:Resource comps and M&A metrics.
Catalysts
WALLBROOK
- Strong newsflow from ongoing delineation drilling (Crusader-Templar/30,000 metres RC and 3,000 metres diamond).
- Deeper drilling at Crusader-Templar (300-700 metres deep).
- Regional activity (Branches - located north and along strike of Crusader-Templar).
- Resource definition (underway).
- Studies (metallurgical test-work existing, other technical studies ongoing).
- Resource update (CY’22).