BUY: 0.26p maiden target price
- We have published an update note on Tertiary Minerals following the publication of their JORC Exploration Target at Mushima North.
- The Exploration Target concerns solely the A1 Target at the Project, hosting 15-30mt at 40-60g/t AgEq.
- The mineralised body is hosted within a flat-lying tabular supergene oxide zone stretching 500m long, 300m wide and 75m thick.
- Tertiary has identified multiple targets over the wider Mushima North that warrant drill testing, with several targets showing similar geological characteristics to the A1 Target.
- Focus at the A1 Target will include drilling to the northwest, southwest and at depth.
- Management will also complete infill drilling, metallurgical test work, mining studies, and plant/infrastructure requirements to derisk the project towards MRE.
- Tertiary plans to deliver a maiden JORC MRE by year end.
- We see Mushima North as holding potential for a bulk-tonnage, low strip open pit operation in a tier one African mining jurisdiction.
- Tertiary trades at a significant discount to emerging market silver-focused development projects at 0.24% of in-situ value vs a peer average of 3.9%.
- We see this valuation disconnect as unwarranted and expect the stock to rerate towards MRE delivery with additional drilling and derisking via metallurgical and mining studies.
Conclusion: This is an important milestone for Tertiary and their greenfield Mushima North discovery, outlining a shallow, flat-lying Exploration Target at the Mushima North silver-copper-zinc project. We make two key points regarding Mushima North. First, the target remains open in multiple directions, leaving ample scope to expand tonnage. Second, the primary source of mineralisation at the project remains unknown, suggesting potential for a discovery at depth. Further drilling will now be completed, alongside metallurgical test work, to derisk and add scale to the project. In the note we highlight a trading multiple valuation scenario which supports a maiden target price of 0.26p/share
*SP Angel acts as Nomad and Broker to Tertiary Minerals
Analysts
Arthur Parish – Arthur.Parish@spangel.co.uk – 0203 470 0476
John Meyer –John.Meyer@spangel.co.uk – 0203 470 0490
Simon Beardsmore – Simon.Beardsmore@spangel.co.uk – 0203 470 0484
Sergey Raevskiy –Sergey.Raevskiy@spangel.co.uk – 0203 470 0474
Sales
Richard Parlons –Richard.Parlons@spangel.co.uk – 0203 470 0472
Abigail Wayne –Abigail.Wayne@spangel.co.uk – 0203 470 0534
Rob Rees –Rob.Rees@spangel.co.uk – 0203 470 0535
Grant Barker – Grant.Barker@spangel.co.uk – 0203 470 0471
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+SP Angel employees may have previously held, or currently hold, shares in the companies mentioned in this note.
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