Blackstone Minerals Limited

BSX Details

Blackstone Completes Scoping Study at Ta Khoa Nickel Project: Blackstone Minerals Limited (ASX: BSX) is engaged in the exploration and development of minerals. As on 14 October 2020, the market capitalization of the company stood at ~$154.07 million. The company has recently completed the Scoping Study for the development and restart of the Ta Khoa Nickel-Cu-PGE Project, which comprises an open pit mine at the Ban Phuc Disseminated Sulfide, upstream processing and downstream processing to produce a Precursor product for Asia’s growing Lithium-ion Battery Industry. The completion of study reflects an important milestone and an initial platform to build a mine-to-market nickel business over the coming years with several upside opportunities. The company has provided highlights with respect to study, wherein it reported annual production of ~12.7ktpa Ni over the project life of ~8.5-years and revenue of ~US$3.3 billion. The company also reported net pre-tax cashflow of ~US$1.2 billion.

Completion of Share Purchase Plan: The company has recently completed its share purchase plan and received $3 million of total applications in addition to the $17.8 million in its placement to sophisticated and professional investors.

FY20 Highlights: During FY20, revenue of the company went up to $46.3k, up from $12.34k, but the loss of the year increased to $7.69 million from $4.18 million in FY19. During the year, the company also welcomed EcoPro as a strategic partner with a $6.8 Million investment into Blackstone.

FY20 Financial Highlights (Source: Company Reports)     

Outlook: The Company will continue its mineral exploration activity at and around its exploration projects in Vietnam, Western Australia, and Canada with the object of identifying commercial resources. It is continuing its drilling campaign, with six drill rigs currently in operation, together with a geophysical program which continues to provide ongoing success identifying multiple new prospects.

Stock Recommendation: BSX is maintaining a portfolio of highly prospective Australian Projects and is working on unlocking the value shareholders in the coming months. As per ASX, the stock of BSX is trading close to its 52-weeks’ high level of $0.540 and retains limited potential for further growth. The stock of BSX gave a return of 86.95% in the past three months but a negative return of 2.27% in the last one month. On a technical front, the stock of BSX has a support level of ~$0.391 and a resistance level of ~$0.495. On a TTM basis, the stock of BSX is trading at a price to book value multiple of 8.3x, higher than the industry median (Basic Materials) of 2.6x. Considering the current trading levels, volatile returns in the past three months, higher P/BV multiple than industry median and softer market conditions, we suggest our investors to wait for a better entry levels and recommend an ‘Expensive’ rating on the stock at the current market price of ~$0.430, down by 11.341% on 14 October 2020.

BSX Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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