VSA Update10 Jan 2025 16:20
VSA capital daily mining comment (AKA research note update)
Panthera Resources (PAT LN) has provided further detail on its arbitration following its 16th December update that confirmed the initial hearing had been held. Key aspects of the process have been agreed including that the Permanent Court of Arbitration will be the administrator. Perhaps most importantly, the seat of the arbitration is confirmed as London, UK; a neutral venue as the Bilateral Investment Treaty is between Australia and India. We believe that PAT will be pleased with this venue given the UK’s well-established arbitration framework, its reputation as a neutral and impartial venue for arbitration and a track record of efficient and transparent processes. The announcement highlights that much of the key information during the process will remain confidential but PAT will update the market where possible. As highlighted in our initiation (please click here) PAT has not yet adjusted to trading on the basis of a risked percentage of the award although the recent announcements which demonstrate that the process is clearly underway has led to an 20% increase in the share price since the start of December. Our analysis of the peer group indicated that the timing of such a rerating, which has further to go in our view given PAT’s claim that it will likely be in the order of hundreds of millions, occurs at different stages during the process. However for PAT, we believe the necessary pieces are in place with the process advancing and somewhat derisked by today’s announcement confirming our view that this is an attractive entry point. We also note that announcement of the conversion of shares from convertible loan notes issued in November. The 1.8m newly issued shares, a dollar value of US$125k takes shares outstanding to 198.1m. The impact of this on our target price and valuation is negligible and remains at 40p/sh. We reiterate our Buy recommendation and 40p/sh. target price.
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