Copperstone Resources - Soaring Cu price is boosting mineral value

Q1 report due on Wednesday 19 May Cu price up 39% YTD, ~SEK 73bn in total Cu resources New fair value range of SEK 0. 7-2. 2 (0. 7-2.

3) per share Q1’21 expectations and additional capital raised during Q2 We estimate Q1 sales of SEK 0m and EBIT of SEK -9m, negatively affected by an extraordinary expense of ~SEK 7m related to the rights issue completed in Jan ’21. The timeline for obtaining the environmental permit is expected to remain unchanged, with Copperstone aiming to submit a permit application for the Viscaria mine during H2’21. On 9 April, the company announced the completion of a rights issue of 128m new shares at a subscription price of SEK 0.

75 per share, corresponding to a 9. 6% discount to the 20-day volume weighted average share price prior to the rights issue. Total proceeds amount to SEK 96m before related costs of SEK 1.

5m, and we see it as a positive sign that Copperstone is continuing to strengthen its financial position and is attracting increasing interest from professional investors. Cu price trend continues to boost resource value The current Cu price of USD 10,725/tonne represents a +39% YTD development, increasing the value of Copperstone’s measured, indicated and inferred Cu resources to ~SEK 73bn (up 19% vs. ~SEK 62bn as of 24 March 2021).

We continue to argue that the outlook for copper is strong, because it is required for several in-demand products such as batteries and wind turbines. Our ’21 EBIT estimate is lowered by SEK 1. 5m (~11%) as a result of extraordinary expenses expected in Q2’21 related to the directed rights issue completed in April.

However, we leave our estimates for ’22e-’23e unchanged. New fair value range of SEK 0. 7-2.

2 (0. 7-2. 3) per share Due to the 9.

6% discount in subscription price of the new rights issue, we make a slight revision to our fair value range, lowering it to SEK 0. 7-2. 2 (0.

7-2. 3) per share. Despite this, we deem the long-term case to be intact, partly supported by the positive trend in the copp.