Liberum11 Mar 2019 10:04
Post from the other BB:
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Liberum note...
SOLG LN | ARS LN | 8 March 2019^
The value case for greenfield copper
Following a results season where the major mining companies proudly paraded their copper credentials, including Rio and BHP uncharacteristically drawing attention to early stage discoveries at Winu and the Stuart Shelf, industry attention on copper development opportunities has never been greater.
Despite this, domestically listed greenfield exploration appears to have slipped largely under the radar of UK institutions. In London, we believe we have the two most exciting pure play greenfield copper developments in the l listed sphere, SolGold (BUY, TP 72p) and Asiamet (BUY, TP 18p). Excluding Ivanhoe's enormous Kamoa Kakula discovery in the DRC, there are no other listed exploration companies globally with copper assets that are both larger and higher grade.
Both of these stocks offer potential for returns in excess of 100% in the near-term from third party bid/financing developments and/or further discoveries. In this note we draw attention to the valuation arbitrage between producers and developers which we believe will drive third parties to finance or bid for these companies on attractive terms. The combination of a universally bullish outlook for copper among major miners, the best balance sheets in over a decade and the scarcity of listed businesses with open registers and world class copper assets drives our optimism in this space.
The exploration landscape: SolGold and Asiamet stand out globally.
Of the publicly listed companies globally that offer pure exposure to greenfield copper projects, none have assets that are both larger and higher grade than SolGold's Alpala and Asiamet's Beutong...
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