Chariot Ltd (AIM:CHAR, OTC:OIGLF) is set for ‘significant progress on several fronts’ and has potential to add material shareholder value, according to stockbroker Peel Hunt.
Repeating a ‘buy’ rating the broker followed up Chariot’s announcement, on Monday, that it had entered into a partnership to advance a renewable energy project for a mining operation in Zambia.
Chariot’s Transitional Power division, alongside partner Total Eren, entered into the venture with First Quantum Minerals (TSX:FQM), providing competitively priced and sustainable power to the mine.
The AIM-quoted firm will now advance the commercial elements of the project, Peel Hunt analyst Werner Riding noted.
“This builds on another solar project announced with Tharisa Mining last month, and will likely be followed by further tie-ups in the coming months as the Transitional Power team executes on its pipeline and scales up the business,” the analyst said in a note.
Along with its progress in the renewable business, Chariot has significant advanced its gas business in recent months – most notably through the success of new wells at the Anchois project, offshore Morocco.
“Having recently completed operations at the highly successful Anchois appraisal and exploration well, Chariot now has two wells suspended as future producers, and a significant volume of commercial gas to monetise,” Riding said.
“Over the coming weeks and months, next steps should see discussions progress to firm up terms for a gas offtake agreement.”
He added: “The Anchois-One and Two wells have all but confirmed a new commercial gas development offshore Morocco, located in shallow waters and within close proximity to shore, where a straightforward ‘off-the-shelf’ processing facility can be installed,”
“Following a near-term resource update (expected to be positive), the team will likely move to progress these various initiatives.”
The analyst suggests that Chariot can bring the project to final investment decision by the end of 2022, before fast-tracking development to first gas production by 2024.
With a price target of 35p, the stockbroker sees Chariot rising substantially from its current 11.3p share price.