Case Study - Blackstone Minerals Ltd (ASX:BSX)

October 29, 2021

Blackstone Minerals Limited (ASX:BSX) is a mining explorer focused on the exploration and development of its 90% owned Ta Khoa nickel Project in Vietnam, where Blackstone intends to build an integrated upstream and downstream processing facility that produces NCM Precursor products for Asia’s growing battery industry. Initially, the company was focused on gold and nickel exploration in Western Australia. Following the surge in demand of nickel and cobalt due to the EV growth story, Blackstone acquired the Ta Khoa Nickel Project in Vietnam in May 2019. Ta Khoa is now the primary focus of the company with extensive exploration work conducted since acquisition and a clear path to project development and nickel production. Upon the Ta Khoa acquisition, the BSX share price tracked the nickel market.

Key Investment Highlights:  

  • Exposure to the ‘green’ movement: exposure to the growing EV and Lithium-ion battery thematic through the up-stream production of nickel and downstream production of NCM811 precursor battery products
  • District scale Ni sulphide opportunity: BSX’s flagship asset, Ta Khoa, located in Northern Vietnam, comprises up to 25 massive sulphide vein (MSV) and disseminated sulphide (DSS) targets, leading to attractive project economics and long-term life of mine 
  • Pre-Feasibility Study: recently released a compelling PFS on the downstream nickel refining facility in Vietnam. The project was placed into care and     maintenance due to a low nickel price and overly onerous Government tariffs on nickel concentrate exports. To counter these tariffs, BSX investigated the downstream processing of nickel concentrates into battery precursor products which has opened the door to whole new nickel refining opportunity (economics below) 
  • Substantial nickel production: the downstream facility contemplated in the PFS is designed to produce 85.6ktpa of NCM811 precursor from a nickel concentrate throughput of 400ktpa. This is the equivalent of producing 43.5ktpa of nickel metal. The operating life has been limited to 10 years based on the concentrate feed from the Ta Khoa nickel project which will deliver less than half the required nickel concentrate, the rest to be sourced from third parties 
  • Project Economics: The 10-year PFS shows revenue of US$14bn and a net cash flow after tax of US$3.6bn. Cash costs as stated in NCM811 tonne, are     US$11,125/t with an estimated realised NCM811 price of US$16,397/t. Capex is slated at US$491m and the project has a post-tax NPV8 of $3.6bn 
  • Scalable and modular downstream refinery: Blackstone’s intention is to collaborate with Tier 1 partners to unlock the value of its expanded downstream refinery strategy, initially in Vietnam with future potential to enact a global strategy 

Stay up to date with PAC Partners and the markets.

Subscribe to our Newsletter

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.