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DGAP-News FYI Resources Ltd (FYI, $0.52, mkt cap $167M). Updated DFS Showcases Outstanding Project Metrics. BUY, PT $1.52 (prior $0.68).

Nachrichtenquelle: EQS Group AG
13.04.2021, 14:45  |  139   |   |   

DGAP-News: FYI Resources / Key word(s): Study
FYI Resources Ltd (FYI, $0.52, mkt cap $167M). Updated DFS Showcases Outstanding Project Metrics. BUY, PT $1.52 (prior $0.68). (news with additional features)

13.04.2021 / 14:45
The issuer is solely responsible for the content of this announcement.


13 April 2021

Event:

- Updated DFS.

 

Investment Highlights:

- Project economics further improved in updated DFS: the company recently released an updated DFS for its HPA Project, with outstanding project economics that further improve what was already a robust case. The headline metric was the 87% increase in project NPV to US$1.0B, from US$543M.

- Updated project parameters enhance an already compelling project: FYI will scale up average annual production to 10ktpa HPA, +25% on prior DFS. The company will also now produce 1,500tpa 5N HPA, while the balance of annual production remains 4N HPA. The basket price has accordingly been increased to US$26,400/t HPA product. The company has also lowered its discount rate to 8% (prior 10%) and increased AUDUSD to 0.75 (prior 0.70).

- The Cadoux Kwinana HPA Project remains a massive, long life, high grade HPA project, now with improved project metrics: the updated DFS highlights include NPV8 US$1.0B (prior US$543M) and IRR of 55% (prior 46%). The project retains its attractive capital intensity with modest - and modestly revised - capex of US$202M for 10ktpa of HPA product. Payback has been reduced to 3.2 years (prior 3.6 years). High margin project with low operating cost of US$6,661/t (prior US$6,217/t). No change to the JORC estimates of Reserve or Resource, with the Reserve comfortably supporting a 50+ year mine life.

- Cash of $10M (FSBe) and no debt. The company continues to advance finance arrangements, progress marketing discussions, and work with MOU signatory Alcoa to establish a JV agreement.

 

Earnings and Valuation:

- We continue to forecast commissioning and ramp in FY23e with first full year of production in FY24e to deliver earnings of $143M (prior $94M).

- We have an increased risked valuation of $1.52/share (prior $0.68; 0.65x NPV unchanged). Our valuation is underpinned by an unrisked NPV10 of A$1,124 (prior $770M) for the HPA Project in the base, assuming first production in FY23e, twelve-month ramp, and HPA price of US$26,400/t (prior US$24,000/t).

- Considerable valuation upside potential: we note further drivers of value in the HPA project include life extension, potential production capacity upgrade, and/or inclusion of by-product revenue.

 

Recommendation:

- We continue to recommend FYI as a Buy with an increased price target of $1.52/share (prior $0.68), due to its long life, high grade kaolin asset, and low-cost processing HPA refinery project. FYI aims to be a single source integrated producer of high quality HPA with supply provenance wholly from a tier 1 mining jurisdiction.

- Catalysts for the stock include: 1) FEED and FID decisions and commencement of the Cadoux HPA project; 2) customer offtake MOUs and marketing relationships; 3) updates on financing arrangements; 4) updates on the Alcoa JV; and 5) updates on LOM extension, capacity upgrade, and/or by-products.

 

[Details in attached 11-page report.] Download below.

 

Matthew Chen

Research Analyst

D: +61 2 9993 8130

E: matthew.chen@fostock.com.au

www.fostock.com.au


Additional features:

File: Full report


13.04.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
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1184229  13.04.2021 

fncls.ssp?fn=show_t_gif&application_id=1184229&application_name=news&site_id=wallstreetFYI Resources Aktie jetzt über den Testsieger (Finanztest 11/2020) handeln, ab 0 € auf Smartbroker.de



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DGAP-News FYI Resources Ltd (FYI, $0.52, mkt cap $167M). Updated DFS Showcases Outstanding Project Metrics. BUY, PT $1.52 (prior $0.68). DGAP-News: FYI Resources / Key word(s): Study FYI Resources Ltd (FYI, $0.52, mkt cap $167M). Updated DFS Showcases Outstanding Project Metrics. BUY, PT $1.52 (prior $0.68). (news with additional features) 13.04.2021 / 14:45 The issuer is solely …

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