Copperstone Resources: Viscaria re-opens as permit work continues - ABG
Q2’21 an eventful quarter with Viscaria re-opening
Copperstone reported sales of SEK 0m (ABGSCe 0m) and EBIT of SEK -3m (ABGSCe -3m). The company stepped up its efforts towards submitting its permit application, with Viscaria re-opening during Q2 in order to conduct various environmental studies inside the mine. The opex base is also ramping up in tandem, increasing to SEK 25m in the quarter (vs. 10m in Q2’20), partly due to the company expanding its team. No changes were communicated regarding the timeline of the permit application, where the target is still to submit the application by the end of ’21. During the quarter, Copperstone completed a directed rights issue of SEK 96m, which entailed SEK 1.5m in transaction expenses. Moreover, the company’s exploitation concession Viscaria k no. 7 was confirmed by the Swedish government. Management estimates that the 64ha area covered by k no. 7 contains approximately 15% of Viscaria’s total mineral resources. However, they add that the confirmation of the concession was expected, and thus was already factored into their plans.
Total Cu value of ~SEK 66bn, up 13% YTD
The copper price is down 7% since our previous research update, but the current price of USD 8,776/tonne still represents a 13% YTD increase. The current value of Copperstone’s measured, indicated, and inferred copper resources amounts to SEK 66bn, and the iron resources in the Fe Domain of Viscaria’s D zone are valued at SEK 13bn at an iron price of USD 160/tonne.
Fair value range of SEK 0.7-2.2 per share
We reiterate our fair value range of SEK 0.7-2.2 per share. We argue that although there is still a long way to go before mining operations can commence, we are seeing more and more concrete steps towards submitting the environmental permit application, which will be a big step on the way.
Länk till analysen i sin helhet: https://www.introduce.se/foretag/copperstone-resources/Equity-research/2021/8/copperstone-resources---viscaria-re-opens-as-permit-work-continues/
