Enova Mining Limited [ASX:ENV]
Metals & Mining
A Promising Rare Earths Explorer
We initiate coverage on Enova Mining Limited (ASX: ENV) with a 12-month target price of A$0.022, representing a 214% upside from the current share price of A$0.007. Enova Mining Limited is an emerging resource company focused on exploring critical minerals, most notably rare earth elements (REEs), lithium and subordinate metals such as scandium, titanium, niobium and zirconium. With its flagship projects, CODA North in Minas Gerais, Brazil and Charley Creek in Australia, Enova is strategically positioned to capitalise on the rising global demand for critical minerals in renewable energy, electric vehicle (EV) industries, and advanced technologies. Located in mining-friendly jurisdictions with access to infrastructure, these projects form the cornerstone of Enova’s diversified portfolio.
Massive Resource Potential at CODA North with Outstanding Results
The CODA North project in Brazil has emerged as a promising source of REEs, highlighted by recent exploration success. High-grade drill assays revealed a length weighted average grade of 2296 ppm TREO above nominal cut off 1000 ppm and 3266 ppm above nominal cut off 2000ppm, with notable intersections including 45m at 2,430 ppm TREO, 18.6m at 4,471 ppm TREO and 10m at 5,208 ppm TREO. These results underscore CODA North's potential as a significant REE deposit. In addition, CODA North's recent February 2025 drill results, featuring titanium dioxide intercepts exceeding 15%, further strengthen prospects by highlighting its comineralisation potential. Although these early results are incredibly promising and have huge upside potential, we remain cautious in our valuation due to the early stage of the project.
Diversified Portfolio Providing Downside Protection
Enova’s strength lies in its diversified and large mineralised asset base, both geographically and across a range of critical commodities with vast expanse and easy access of tenements. In addition to REEs, Enova’s portfolio includes scandium, a critical mineral for lightweight alloys in aerospace and defence, and titanium which is widely used in industrial applications such as medical implants and devices, critical pigment in paints, coatings, plastics, and cosmetics. This diversification mitigates downside risks against commodity-specific market volatility and improves the viability of its REE operations by generating revenue from co-products. Enova is well positioned to pivot as market dynamics evolve by spreading exposure across commodities and regions, maximising its growth opportunities.
Valuation Summary – Sum of the Parts, Asset-Based Valuation
Our valuation of Enova Mining uses a resource-based comparable methodology, applying sector-average EV/Resource multiples adjusted for Enova’s early-stage status. The Base Case estimates an enterprise value (EV) of A$39.2m, implying a share price of A$0.021 and a 193.8% upside, while the Bull Case assumes stronger sector conditions, yielding an EV of A$45.0m, an implied price of A$0.024, and a 238.8% upside. The valuation conservatively excludes upside from several minerals such as scandium and niobium, underscoring the significant potential for future re-rating as these projects advance. Although Enova faces risks related to its micro-cap status and the absence of JORC-compliant resources at CODA North, the extensive continuous REE mineralisation presents substantial upside potential, making it a compelling investment opportunity. Furthermore, the Charley Creek project strengthens Enova's investment case with its JORC-compliant alluvial rare earth resource.