First Equity Research has looked at four spin-offs planned by Power Metal Resources PLC (AIM:POW) this year and suggests if all go well there could be a six-fold increase in their value.
The four potential listees are First Class Metals (FCM), First Development Resources (FDR), Golden Metal Resources (GMR) and New Ballarat Gold Corporation (NBGC).
“Each listed company, with its own management team, will be a more focused operation, having greater access to capital and thereby an enhanced project acceleration ability,” said the note.
“A successful listing of all four in 2022 could provide an estimated valuation uplift to £22.6m, from the £3.7m figure shown in the latest known internal POW management accounts as at 30-Nov 2021,” suggested First Equity.
In addition to the four 2022 IPOs, there could be potential for between 4 and 7 further spin-offs, it adds.
The research house adds that most of the projects and investments are in countries with very low geopolitical risks, in particular the four DSOVPs in the queue for IPO in 2022, with exploration interests in Australia, Canada and USA.
‘Proof of concept’ will be confirmed once the first anticipated DSOVP, most likely FCM, lists on AIM in this quarter.
Given the potential from the IPOs, the rating on Power Metal is ‘Buy’ with a price target of at least 4.3p per share, compared to 1.48p, up 11% today.