Interview with Scott Williamson, Managing Director of Blackstone Minerals (ASX:BSX) Blackstone Minerals: a nickel-cobalt-gold (battery/precious metals) company looking to get into production within the next 3 years. Ambitious.
Blackstone Minerals is an ASX-listed junior, exploring the Ta Khoa Nickel Project in Vietnam, the BC Cobalt Project and gold and nickel projects in Western Australia. The primary focus is on Ta Khoa, which previously operated between 2013 and 2016. Williamson claims the previous owners sunk over A$130M into the project; this creates an obvious disparity with Blackstone Minerals' market cap, A$27M, which had been steadily falling away but has made a comeback in the last few weeks. The share price stands at A$0.14 today. Blackstone Minerals is looking to bring the project back into production and take advantage of the inbound EV revolution, by feeding the nickel concentrate into nickel sulfate for the Li-ion battery industry.
What's the big news recently? A deal between EcoPro, the largest cathode manufacturer in Korea and second-largest globally, and Blackstone Mineral was announced. The binding share purchase agreement outlines a commitment for A$6.8 million at a 62% premium to Blackstone Minerals’ 30 day VWAP. EcoPro will end up with 17% of Blackstone Minerals shares. Looks like a smart piece of negotiation.
Williamson thinks the market will take a while to process the significance of this transaction and is perhaps a little unaware of how large a player EcoPro is. Williamson sees EcoPro as the "perfect partner," and hopes it will reveal its value over time.
Blackstone Minerals is on track for its maiden resource in June/July. This will be followed by a PEA in August/September. Williamson sees this as a catalyst moment where the market will realise just how much nickel has been left behind, and how economic the first ore body will be. The money will also be used to explore other ore bodies, but the main focus is to move all the studies through to a bankable Feasibility Study. Blackstone Minerals is fully funded to this point. The cost structure at the Ta Khoa Nickel Project is impressive; to put this into context, drilling costs A$60 per metre, as opposed to A$300 in Australia and A$500 in Canada. The nickel orebody itself is twice the grade that Blackstone Minerals was expecting at 1% nickel. Williamson describes this nickel as a "significant tonnage..." that will "deliver a 20-year mine."
Williamson is currently conducting metallurgical test work in order to assess the potential monetisation of the byproducts (platinum, palladium, gold, rhodium, copper, cobalt) at Ta Khoa, but he is confident all the metals will be economic and add an extra 20% revenue on top of the nickel.
What is the CAPEX looking like at Ta Khoa? c. US$100M for a downstream processing facility, plus additional capital to upgrade the concentrator. Williamson is confident Blackstone Minerals will "land below" A$200M total. Williamson claims this is very competitive. He also insists that EcoPro will not accept anything less than achieving production within 3 years. Will this additional pressure help or hinder Blackstone Minerals?
What did you make of Scott Williamson? Is Blackstone Minerals in for 2020? When is nickel going to experience the kind of growth that EV/battery metal investors are craving? Comment below and we will respond.
And a FREE 'Not A Mug' Crux Investor mug to the first person to guess the song name and artist featured in the title of this video! (One mug per person).
2:07 - Company Overview
3:41 - News Announcement: Negotiations and Terms. What did EcoPro Buy into?
10:25 - Market's Reaction: What has the Share Price Done and What's Stopping Investors?
11:48, 17:24 - Vietnamese Assets: Why Did They Shut Down and What are the Plans Going Forward?
16:05 - Monetising the Bi-Products
18:16 - Low CapEx Compared to Peers: Getting into Production
21:17 - 2020 & What Investors are to Look Forward to
23:00 - Financed 'til Production (?)
25:06 - BFS Timings: Who's Financing the Studies?
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