Can Blackstone Minerals position itself to meet the growing demand?

Team Veye | 08 Apr 2020 ASX - BSX
Can Blackstone Minerals position itself to meet the growing demand?

Blackstone Minerals Limited (ASX: BSX)

Blackstone Attracts $6.8 million Investment at a Substantial Premium from EcoPro

Blackstone Minerals Limited (ASX: BSX) on 7 April 2020 announced that it had signed a binding share purchase agreement with EcoPro Co. Limited (EcoPro). EcoPro’s subsidiary, EcoPro BM, is the world’s second largest and Korea’s largest nickel-rich cathode materials manufacturer. The binding share purchase agreement outlines a firm commitment to raise $6.8 million (before costs) through a placement of 40 million fully paid ordinary shares at an issue price of $0.17 per share, which represents a 62% premium to Blackstone Minerals’ last traded price. The binding agreement outlines an alliance structure whereby EcoPro and Blackstone Minerals will work in partnership (through an additional investment via a Joint Venture Agreement) to develop a downstream processing facility in association with Blackstone Minerals’ Ta Khoa Nickel-PGE Project in northern Vietnam.

(Chart source: TradingView)

  • Blackstone Minerals signs binding share purchase agreement with EcoPro;
  • EcoPro’s subsidiary, EcoPro BM, is the world’s second largest nickel-rich cathode materials manufacturer; 
  • Placement of 40 million shares at $0.17 per share, representing a 62% premium to Blackstone Minerals’ last traded price; 
  • EcoPro and Blackstone partnership to develop a downstream nickel processing facility in northern Vietnam.

 

Terms of the Agreement include:

  • Placement of 40 million shares at $0.17 per share, to be issued under the company’s existing placement capacity with shares to be issued and allotted by 16th April 2020. 
  • EcoPro to appoint a director to the board of Blackstone Minerals; 
  • Blackstone Minerals to exercise the binding option agreement to purchase AMR Nickel Limited’s 90% interest in the Ta Khoa Nickel-PGE Project (see ASX announcement dated 8th May 2019 for full details); 
  • EcoPro and Blackstone Minerals to form an alliance whereby the next stage of the partnership will be an additional investment via a Joint Venture Agreement to develop the downstream processing infrastructure project in association with Blackstone Minerals’ Ta Khoa Nickel-PGE Project, Vietnam. (Data Source – Company Reports)

 

Veye’s Take

For EcoPro it is very important to secure stable and competitive metal materials in the fast-growing secondary battery and cathode active material business. EcoPro therefore decided that it was a good time to invest in Blackstone. EcoPro is continuing with its partnership so that it can succeed in a downstream JV in the near future. Blackstone Minerals’ Ta Khoa Nickel-PGE Project has the potential to deliver the critical raw materials required for EcoPro’s cathode manufacturing to meet the demand from the imminent electric vehicle (EV) revolution. The investment of $6.8m at a premium strengthens Blackstone Minerals’ alliance with EcoPro. In our earlier analysis we had mentioned that the chart was indicating about correction losing steam and attempting to resume the uptrend. The stock has completed inverse head & shoulder pattern. Holding $0.14 it can have the potential to touch $0.18 in the medium to long term. Veye recommends a "Buy" on “Blackstone Minerals Limited” at the current price of $0.14 

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