Fundamental Research Corp's new Report on Braveheart shows that fair value is C$0.45 BUY Current Price: C$0.10
Highlights
* An updated Preliminary Economic Assessment (PEA) on the Thierry Mine project (Ontario) confirmed that the initial CAPEX can be lowered by 21%, by mining the upper workings initially, and deferring the construction of a shaft to access the lower workings.
* As a result, the project’s AT-NPV6% increased 20% to $287M, with an attractive AT-IRR of 25%. We are raising our fair value estimate on BHT from $0.39 to $0.45 per share.
* BHT has obtained an exploration permit. Management is planning a 5,000 m drill program to potentially upgrade and expand the current resource estimate.
* A PEA on the Bull River mine is expected by May-June 2022. As the initial CAPEX estimate is very low ($6.5M), we are expecting robust economics.
* is working on a permit application to resume production. We note thmayat permitting remains a key risk for projects in B.C. Our discussions indicated that management is expecting to receive a permit by Q4-2022. If successful, we do not believe they will have any challenges raising capital, and/or advancing the project to production.
* In our worst-case scenario, the company runs into permitting issues at Bull River with zero value assigned to the project, our fair value estimate drops to $0.22 per share. BHT is trading at a 55% discount to our worst-case scenario.
* We believe the current environment (inflation, potential for additional supply chain disruptions amid rising tensions between the West and East, and high oil prices, partially offset by slower growth in China) will support metal prices.
* Upcoming catalysts include drilling, permitting, and a PEA on Bull River.
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