Blackstone Minerals Ltd (ASX:BSX, OTCQX:BLSTF) has maintained a speculative buy rating from stockbroking firm Euroz Hartleys and retained a share price target of $1.00 following an updated mineral resource for its Ta Khoa nickel-cobalt-platinum group metals (PGE) project in Vietnam.
The Ta Khoa global resource was increased to 130 million tonnes at 0.37% nickel for 485,000 tonnes of nickel equivalent.
The following is an edited excerpt of Euroz Hartleys’ research coverage on Blackstone Minerals.
Key points
The resource largely consists of the Ban Phuc disseminated sulphide deposit which contains 123 million tonnes at 0.37% nickel (previously 59 million tonnes at 0.48%), with low strip ratios (< 3:1)
Maiden resources were also defined for Ban Chang, King Snake and Ban Khoa.
Although the resource is somewhat low grade (slightly lower than Euroz Hartleys was expecting), it is important to remember BSX is planning on going downstream (to produce NCM811 precursor for battery cathodes) which will be capable of accepting lower grade concentrates than usual industry standard and which should also benefit recoveries in the front end.
As a reminder, BSX is planning to feed its downstream from its own 8-million-tonnes per annum front end concentrator which will be supplemented with third-party concentrate feed.
Euroz Hartleys Maintain their Speculative Buy recommendation and $1.00/share Price Target.
Upcoming catalysts in the December quarter include:
- Pre-feasibility study for the upstream mine due in early calendar year 2022.
- Exploration results.
- Potential joint venture negotiations.
- Definitive feasibility study on the downstream refinery due first half CY22
“BSX has a memorandum of understanding with one of the largest cathode producers in South Korean company EcoPro BM (owns 12% of BSX) which has +A$10 billion market cap. We have a Speculative Buy recommendation and a Price Target of A$1.00/sh.
"Our base case valuation of A$1.43/sh is a NPV12 after tax (60% risked or 40% x NPV12).”