RE: De merger follow on19 Apr 2026 11:52
For anyone that doesn't have access:
1)
"Bit of a long piece but hopefully helpful to holders and those who don't own the shares.
For STRATEGIC MINERALS, the monster headline from the recent Zeus analysis is that the company can generate today's £183MILLION market cap in cashflow post tax in 8-9 months of production. Cumulative post tax cashflow comes in at a massive >$3.2BILLION with the staggering piece being that it's based on a Tungsten price of $850/mtu and NOT the current >$3,000/mtu levels. It is an extreme valuation anomaly resulting in the shares being totally mispriced right now. It is therefore of no surprise that Zeus recently moved to 14.9p from 4.8p but that's still only 30% of nav and at $850 Tungsten. To quote them "returns will be astronomical if the spot price can be maintained". All of this doesn't factor in too the very realistic scope for further growth upside and from satellite developments within the licenced area. "Together the consistent intersection of the SVS, confirmation of mineralised continuity into new areas and the identification of additional high‑grade tin all point towards the potential for further resource growth".
Finer details matter so couple of things regarding the numbers. The cashflow post tax model doesn't include a list of things so time to cover that off immediately (but again remember we're working off very big numbers and $850/mtu, NOT spot!). What's missing that needs capturing? That list comprises working capital movements, mine closure/rehabilitation provisions, UK environmental bonds and of course capex contingencies. But even after such deductions the numbers are still huge with free cash likely well north of the current market cap. If strong prices or even today's pricing persists into production then you're looking at a scenario where yearly free cash flows will be many multiples of today's market cap.
For those that have done the work already, this will all resonate (in part or full) but for others that's clearly pretty striking data. Quite simply, the numbers are very big vs the current price tag.
Analysts at Zeus just said in their upgrade to 14.9p: "Despite its high-grade of tungsten and its recent improvement in valuation Strategic Minerals remains the lowest valued of all of the companies we identify in our series - especially when set against several of it’s competitor companies which are further back on the development curve as we see it"
"It is hitting all the points we expect in a high priority project – it is high-grade; it is open along strike and at depth; it lies in an area known for historical mining and which needs further inward investment; it has tacit local and government support, and; it is progressing in a very robust tungsten price environment – and an environment in which we see demand only set to increase against a poor supply outlook"
So now time now to look a bit closer at some of the detail in the recent 29 page Zeus upgrade.
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