Shallow Muga Mineralisation Highlights the Way Forward / Speculative Buy $0.62 (By Taylor Collison)
Our View
The latest drilling on the Muga permit of the Muga-Vipasca Project (formerly the Javier Project) highlights the potential to commence mining in relatively shallow, high-grade potash mineralisation. This will further improve the economics of the proposed project which already benefits from its location, infrastructure advantages and global cost competitiveness. Our 12 month price target based purely on Muga-Vipasca is A$1.19/share (fully dil.,50%-risked). Considerable upside would be generated by higher RoM feed
grades (~A$0.06/share for every 1% increase in K2O over the first 4 years of processing). Furthermore, duel decline access offers the opportunity for an upscaled plant (ca. 6Mtpa) and increased production rates (~1Mtpa). We maintain our recommendation for Highfield as a Speculative Buy.
Previous