Alien Metals Ltd (AIM:UFO, OTC:ASLRF) investors are set for exciting times ahead, according to broker WH Ireland.
The mining junior today announced it is exercising an option to acquire an additional 39% interest in the Hancock and Brockman iron ore projects in Australia, taking its stake to 90%.
Combined with the recent appointment of Troy Whittaker as chief executive of IOCA, Alien Metal’s subsidiary developing the projects, it demonstrates the conviction to take Hancock into production in the near term.
“Subject to securing minimal capital investment, Hancock will become a low-cost, contractor-operated producer of premium iron ore,” WH Ireland analysts said in a note to clients.
“Low costs (capital and opex) mean the projects are well placed to pick up the expected upturn in the iron ore price and deliver strong returns to shareholders. Our models suggest that Hancock will be cashflow positive within a year of commencing operations," they added.
Alien Metals shares were trading at 0.48p today, valuing the company at £24.3mln.