Der Aufmacher der Sprott-Analyse:
The rutile metallurgy is peer leading; although already known given prior work, Sovereign again has more disclosure than peers because unlike them, there is no grain size, U/Th, or Fe/Fe+Mg issues that management prefer investors not to look at too closely. However, the graphite metallurgy is a new step-change. With ~1% insitu, credits were promising but recovery and product-size was unclear given the unique genesis and flow sheet of floating a mineral sands tail. Now we not only have 60% recovery (above prior 50% guesstimate), to a product with 30% premium-priced jumbo and super-jumbo, lifting to 72% with medium- and large-flake, and just 11% 75-100um fines. The ‘dirty little secret’ of graphite is that whilst fines sales to EVs make up 90% of the promotion, Syrah sold their product for US$490/t in 3Q21 against producing Canadian mines not selling to EVs with US$1,500/t ‘booked not benchmarked’.
Value:
ahead of the scoping study, a 8-10Mtpa operation at 1% TGC and 50% recovery could produce 40-50ktpa of graphite, a credit larger than many primary asset. Early-years 1.5% rutile grades already support >US$20/t insitu, lifting to US$23-25/t including graphite at US$500-1,000/t, with the ability to ‘qualify’ progressively higher prices as rutile generates most FCF. Peers: the quality of the asset is clear when considering Kenmare’s reserves would be valued at like-for-like US$12-13/t, with ~70% of that high-CO2 ilmenite (requiring coal furnace reduction to synthetic rutile) critical ahead of Sovereign’s LSE listing next week. This leaves Sovereign as potentially the largest (SCPe >1Bt including Nsaru), highest value, lowest CO2 deposit globally. Ahead of the upcoming PEA where we will look at a DCF valuation, we maintain our BUY rating, lifting our PT from A$1.20/sh to A$1.30/sh based on 5% in-situ valuation (i.e. US$65/t rutile valuation @ US$1,300/t) over the JORC 644Mt @ 0.96%, now adding graphite on the same metrics but 50%-risked. This is a catalyst heavy name with (a) LSE/AIM listing on December 14, (b) Kasiya MRE, now including graphite and (c) scoping study all in coming weeks, followed by (d) potential doubling of the MRE as Nsaru is added, and (e) an updated CY22 scoping study to capture this.
Ziel auf 1,30AUD erhöht. Der Deutsche Markt steht immer noch unterhalb der Preise vom letzten Donnerstag (!) Für nicht mal -,40Euro ist die Aktie ein Schnäppchen. Zumal die Listung an der AIM nächste Woche und die Scoping-Studie auf Basis der gestern und heute veröffentlichten Daten anstehen. DYOR |
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