Antipa Minerals [ASX:AZY]
Metals and Mining
Undervalued Asset in WA's Gold & Copper Sector with Strong Financials
We initiate coverage on Antipa Minerals Ltd (ASX: AZY) with a 12-month target price of A$0.067, representing a 102% upside from the current share price of A$0.033. Antipa is a leading mineral exploration company focused on discovering and developing gold, copper, and other precious base metal resources in Western Australia's (WA) Paterson Province. With over 3,900km² of tenements, Antipa boasts significant Mineral Resources, including 2.42Moz of gold, 84kt of copper, and 661koz of silver. Its flagship asset, the Minyari Dome Gold-Copper Project, hosts a 2.3Moz gold and 84kt copper resource and is poised for substantial development. AZY holds Farm-ins with industry leaders Newmont and IGO for its Wilki and Paterson growth projects, further enhancing its portfolio. We believe AZY offers a compelling investment opportunity due to its strong resource base, high growth potential, and strong balance sheet (A$36.5m cash at 31 December 2024).
Flagship Minyari Dome is a financially strong, self-sustaining project
Antipa’s 100%-owned, large 900km² Minyari Dome Project is in the highly prospective Paterson Province of WA region, renowned for its Tier-1 gold-copper deposits. The region’s stable regulatory environment and robust mining infrastructure enhance the project’s exploration and development potential. A recently concluded Scoping Study highlights the project’s substantial size and impressive growth prospects on a standalone basis, a ~1.5Moz gold combined open-pit and underground operation capable of producing 1.3Moz of gold over ~11 years. The project demonstrates strong financial metrics at a 90% gold recovery rate, resulting in a post-tax NPV7 of A$598m and a post-tax IRR of 46%.
Compelling drilling results highlight strong MRE growth potential
The CY2024 drilling at Minyari Dome has revealed strong resource growth potential. Phase 1 and Phase 2 campaigns identified new high-grade gold and copper zones, particularly at GEO-01, which is considered to have the potential to become another Minyari. These results have expanded the mineralised footprint, highlighting significant growth potential for AZY. Continued exploration in CY2025 is expected to extend these discoveries further, driving additional Mineral Resource Estimate (MRE) growth potential.
Valuation range of A$0.062–0.072 per share
Using a SOTP-based valuation methodology, AZY is valued at a mid-point target price of A$0.067, representing a Price/NAV of 0.49x. Our model considers full share dilution, including the recently placed shares and cash from the Citadel JV stake sale. Our target price underscores the substantial inherent value of the Minyari Dome Project. As AZY monetises its other growth assets, additional value can be unlocked. Further, any potential M&A news will likely re-rate the stock. Notable risks to our investment thesis include commodity price fluctuations, funding challenges and potential project execution delays.