This result exceeded our expectations of a >300Mt resource at 488Mt. When contained iron is compared with its peers in the sector, Energio looks to be undervalued. Our median valuation for in-situ contained hematite iron in resource is US0.45/t compared with Agbaja’s current valuation of US$0.22/t.
While we concede that there is an argument to discount Agbaja against its peers until beneficiation results are provided, we feel that when the exceptional scalability of the resource, relative ease of mining, proximity to infrastructure and quality of management are taken into account, Energio looks to be undervalued in the sector.
EIO Price at posting:
23.5¢ Sentiment: None Disclosure: Held
