Ferro-Alloy Resources (FAR), backed by Sir Mick Davis, has the potential to become one of the world’s largest and greenest primary vanadium producers, with negative costs after by-product credits, Liberum has suggested.
Last month, FAR raised US$10m to ensure that results from the expanded Feasibility Study (FS) on Phase 1 of the flagship Balausa project in Kazakhstan can be available by mid-2023 with “maximum scope and quality”.
The fundraise was effectively underwritten by Sir Mick Davis’s Vision Blue Resources (VBR), underscoring its faith in FAR and Balausa.
In September, FAR estimated that (assuming the then-prevailing prices) production of c.1.5kpta V2O5-Eq should result in revenue generation of c.US$2-2.3m/month.
FAR’s shares have fallen substantially this year. Given the above, we view the current share price as representing an attractive entry opportunity ahead of a period of significant de-risking, during which a number of catalysts could emerge.
Buy with a target price of 38p is the broker's investment view.