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16/02/21

21:31

Post #: 51052638
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Originally posted by UmiTrader: ↑

STTCOMP DAV FA LONG

Potash assets in East Germany, largest in Western Europe at 567 Mt of K2O across 4 projects.
403 million shares, market cap @7.3c = $29 million, no debt, some listed and unlisted options.
Cash approx. $10 million

These assets were mined years ago before reunification, so the first step is to move from inferred to measured and indicated which requires twinning two historic holes for which the data exists but the physical core doesn't. From there the feasibility studies will be conducted and finance sought. This is low risk because there is no exploration risk, only development risk. A UK broker estimates the NPV of three of the projects adds to $750 million, for which current equity value of $29 million is only 4%. Since a recent capital raising the shares get met with selling every time they look to break away. I believe the overhang is almost gone now and we should see a rerating towards 17c (the UK broker base valuation) and higher once the confirmation drilling and feasibility process begins.

Management intend using modern environmentally friendly mining methods. As the assets are on old derelict industrial sites, and will provide local jobs, there is expected to be no issue obtaining the mining license. DAV owns 100% of the 4 projects.

Potash is a key strategic commodity for BHP for example, and fundamentals are extremely good for the long run with exponential population growth underpinning future fertiliser demand.

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I thought @speckledjim1 had already tipped DAV a month or two ago, besides that some very good points made @UmiTrader.
DAV is certainly worth mentioning as many times as possible, top notch play!
3 Upvote

0 Great analysis

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