Top member reports
Company Report
Last edited 2 years ago
PerformanceCommunity EngagementCommunity Endorsement
Performance (33m)
-19.8% pa
Followed by
38
Straws
Sort by:
Recent
Content is delayed by one month. Upgrade your membership to unlock all content. Click for membership options.
#Business Model/Strategy
stale
Last edited 3 years ago

Blackstone Minerals owns the Ta Khoa Nickel project in Vietnam. Ta Khoa is a Brownfields project with existing underground mine, permitted tailing damn, permitted concentrator in place. BSX’s core focus is two fold;
1.    The upstream unit; nickel exploration to expand existing reserve & resume mining production
2.    The downstream unit; restart Nickel refining operations, progress to construction & output of cobalt manganese concentrate (NCM811) 


Nickel Cobalt Manganese 8:1:1 is the concentrate used is most lithium ion batteries. Nickel is the metal that enables batteries to have capacity, or in a EV ‘’range’’. Nickel content of these batteries has steadily grown and many reports predict that the NCM ratio could skew as high as 9:.5:.5 due to customers ‘’range anxiety’’ quite a bullish prediction for nickel producers.


The downstream unit (concentrator) is planned to take nickel from BSX’s mining operations, as well as concentrates Third Party Feed Partners (agreements in place) to produce NCM811. This is a margin business, meaning it takes the commodities, processes & sells at a margin to the input prices  therefore it is not as leveraged to the spot pricing as the mining business (higher price means more feed for facility, margin always in place through cycle).


PFS numbers for the downstream unit
•    Post-tax IRR of 67%
•    Post-tax NPV $3.5bn (based on 10yr life)
•    PP 1.5yrs
The above numbers I believe are conservative and could the business case for the downstream business unit could stand on its own. The pilot scale concentrator is expected to be constructed and operational near term. It is expected that this will prove out the ability to produce a saleable product to anode manufacturers specifications and will be a source of cash flow in the process.


PFS for upstream unit is due q4 which will shed light on the value of entire operation. Currently BSX have 8 drill rigs onsite and are aggressively drilling out new targets. There are a large number of high value targets and there are no doubts that BSX is proving out a District scale Nickel resource. Currently BSX have shown to have >20yrs reserves, this could easily double with current drilling program. To give some clarity on scale of exploration reserve estimations are due in next year for the following prospects; Ban Phuc DSS, Ban Khoa DSS (disseminated sulphide vein), Ban Chang MSV, King Snake MSV, Ta Cuong MSV (Massive sulphide vien). There are also a number of regional targets BSX has the license to.


Looking forward, the next 12-18 months will be business defining for BSX, with the expectation of;
•    More offtakes and MOU’s with end users
•    Possible Joint venture agreement 
•    PFS for the upstream business unit
•    Slew of new drill results & increasing for the JORC
•    Construction of pilot scale concentrator
•    Final investment decision
 

I will post some thoughts about ESG side of BSX and Vietnam as a local soon.

Whats it worth? 

In my opinion, mutiples of current valuation.