Bora Bora Resources (ASX: BBR) has received a speculative buy from Veritas Securities Limited, with a six-month price target of $1.40.
However, the broker added that based on medium term newsflow and its production scenario assumptions, could see a share price of well over $3.00 per share.
This is more than six-times the last traded price of $0.475.
The following is an extract from the report.
Value adding highest grade Sri Lankan graphite
- BBR is a graphite focused exploration and development company which has a 75% interest in the Matale Graphite Project in Sri Lanka, surrounding an existing graphite mine that has had continuous production for over 100 years.
- Sri Lanka graphite is well known for its very high +90% C grades and also its high purity.
- BBR recently flew a VTEM survey over the Matale Project delineating a substantial bullseye graphite anomaly over the existing Kahatagaha-Kolongaha mine that provides an excellent analogy for any anomalies outlined within the Matale Project.
- With the release of the VTEM results we anticipate several anomalies to follow up with ground based exploration and drilling.
Graphite in demand
- The boom in graphite is being driven primarily by a new generation of Li-ion batteries for Electric Vehicles, mobile phones etc… for which graphite is a significant anode component.
- Coated spherical graphite is a high end value add product (up to $20,000/t) that is used in the burgeoning battery market.
- Graphene is an even higher value add product (up to $100,000/t) which will be used in a variety of applications due to its unique optical, thermal, mechanical and electrical properties.
- The high grade vein graphite from Sri Lanka is ideal for coated spherical graphite and graphene market opportunities.
Matale Project
- Sri Lanka vein graphite is very high grade (+90% C ROM) and high value with excellent and well known purity. A vein of one metre in width could provide a long mine life off a small reserve base. The adjacent Kahatagaha-Kolongaha mine has produced over 300kt of high grade graphite lump over its +100 year life.
- With exploration success we see the potential for a +10 year operation producing ~10ktpa of +90% C ROM ore followed by minimal processing prior to upgrading to coated spherical graphite and/or graphene.
Recommendation and price target
- We initiate coverage and recommend a SPECULATIVE BUY based on positive VTEM anomalies and follow up ground based exploration and drilling newsflow over the next 6 months to provide a further share price re-rating.
- Our 6 month price target of $1.40 per share is based on medium term newsflow and our production scenario assumptions, which if applicable could see a share price of well over $3.00 per share.
http://www.proactiveinvestors.com.au/companies/news/54307/bora-bora-resources-broker-places-6-month-share-price-target-of-140-54307.html
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