Impact: Merged-Co to hold cash of $83m, resulting in a fully funded DFS.
Action: Buy maintained – UBS will be reviewing our forecasts - 12 month target price: A$ 0.34
With a cash balance of ~$20m after the sale of Blackthorns interest in Perkoa, the company was short of funds
to advance Kitumba. Today's deal sees Blackthorn selling down its interest in Kitumba to help fund the project to the next stage.
UBS takes comfort that BTR is expected to be fully funded for completion of the Kitumba DFS, at which point de-risking and improved confidence in the project economics should lead to an improvement in investor sentiment
Upside scenario: Using a pre-feas multiple of $0.07/lb, lifts UBS NPV to $0.72/sh.
Downside scenario: Using a scoping study multiple of $0.02/lb, reduces our NPV to $0.18/sh.
Upcoming catalysts:
Kitumba DFS – Early 2015
IAU Price at posting:
27.5¢ Sentiment: None Disclosure: Not Held
BTR Price at posting:
27.0¢ Sentiment: Hold Disclosure: Held
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