Analysts bullish on Strandline as it moves to develop Coburn mineral sands project in WA
21st February 2020
Resources Rising Stars
Strandline Resources has made big progress towards developing its two key mineral sands projects over the past year. But like so many other companies in this phase, its share price has not reflected the growing value of its assets.
However, this could be about to change dramatically, according to rash of new analysts’ reports just published.
Strandline has been nominated by no fewer than four prominent broking houses as a stock that is set to rise sharply over coming months.
Foster Stockbroking was the latest to join the line of those recommending investors buy the stock this week, setting a 32c price target -almost triple its current price of 12c.
Foster’s research report followed hot on the heels of Shaw and Partners analysis, which set a 34c target price, and Morgans at 38c.
Strandline provided more evidence this week of the strong progress it is making towards development of its flagship Coburn mineral sands project in WA.
It said negotiations with a group of potential lenders, including the Federal Government’s Northern Australia Infrastructure Facility, were advancing well.
As part of this process, SRK Consulting has been appointed as Independent Technical Expert to review the technical aspects of Coburn on behalf of the lenders.
Strandline says Coburn is one of the largest and most capital-efficient mineral sands projects in the world, with an exceptional zircon-titanium product suite, low costs and ability to generate strong financial returns.
In conjunction with financing activities, Strandline is working with engineering and contracting firms on the major procurement and construction packages. The early works site surveying and detailed design of the bulk earthworks and main access road packages have already been awarded.
Initiating coverage on Strandline, Foster analyst Mark Fichera cited several upcoming share price catalysts.
These include binding offtake agreements for Coburn and the completion of financing and the final investment decision for the project.
Fichera also nominated clarity surrounding a free-carry interest in its Fungoni project in Tanzania, the completion of financing and final investment decision for Fungoni, higher mineral sand prices and an increase in JORC Resources or Reserves.
Shaw analyst Andrew Hines said Coburn “is a world class resource which has all necessary permits and approvals and only requires off-take agreements and financing”.
Hines said catalysts for the stock to reach his price target include:
· Off-take agreements announced for Coburn;
· Resolution of the financing options – including details of the necessary equity raising;
· Delivery of the Coburn project through the course of 2020/21;
· Resolution of land access arrangements for the Fungoni project in Tanzania.
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