Copperstone Resources - Work continues toward permit application
Total rights issue proceeds of SEK 266m in ’21 Copper price at USD 10,115/tonne, +31% YTD Reiterated fair value range of SEK 0.7-2.2 per share Q1: fully capitalised and ready for the permit application Copperstone reported net sales of SEK 0m (ABGSCe SEK 0m), EBIT of SEK -5m (ABGSCe SEK -9m) and EPS of SEK -0.01 (ABGSCe SEK -0.02). Opex was negatively affected by costs related to the rights-issue completed in Jan ’21, but the EBIT deviation still came in positive due to higher-than-expected capitalised exploration expenditures from drilling operations. Moreover, the company has completed two rights issues this year (of SEK 170m and 96m). With these proceeds, management claims it is now fully capitalised for the environmental permit application, which is still planned to be submitted in H2’21.
Events during Q2 so far include the appointment of Anna Tyni as CEO and Marcello Imaña as Chief Geologist, and we argue that both appointments show continued progression towards submitting an environmental permit application. ~SEK 69bn total copper value, +31% YTD price development The current copper price of USD 10,115/tonne represents a +31% YTD price development. As a result, the value of Copperstone’s total measured, indicated and inferred copper resources amounts to ~SEK 69bn (-5% vs.
SEK 73bn as of our previous research update on 11 May). Despite a copper price decline since then, we retain a positive view on the long-term price trend due to its use in several high-demand products such as batteries and wind turbines. We raise our ’21 EBIT estimate by 24% (SEK 4m), solely based on the Q1’21 numbers.
Apart from that, we leave our estimates unchanged. Reiterated fair value range of SEK 0.7-2.2 per share We maintain our fair value range of SEK 0.7-2.2 per share. We believe that ’21 could potentially be an eventful year for Copperstone, provided that the environmental permit application is submitted according to the communicated timeline.
With that being said, how....