Krakatoa Resources [ASX:KTA]
Metals & Mining
High-Grade Antimony-Gold Opportunity with Global Significance
We initiate coverage on Krakatoa Resources (ASX:KTA) with a 12-month target price of A$0.047, representing a 368.5% upside from the current share price of A$0.010. The company's valuation is anchored by its flagship Zopkhito Project in Georgia-a high-grade, large-scale antimony-gold asset hosting 26,000t of contained antimony at an exceptional average grade of 11.6% Sb, alongside more than 800,000oz of gold. With grades ranking among the highest globally and the potential to evolve into the world's largest antimony deposit, Zopkhito presents a rare combination of scale, grade, and strategic relevance. Metallurgical test work further de-risks the project, demonstrating antimony recoveries exceeding 90% and the production of saleable, low arsenic concentrates-highlighting strong economic potential. Supported by comprehensive sampling of historical exploration adits, existing infrastructure, and substantial sunk capital, Zopkhito is well-positioned for a near-term uplift in value as Krakatoa progresses toward delivering a JORC 2012-compliant resource.
Antimony-Gold Scale with Global Significance
With world-class grade, meaningful scale, and strategic location, Zopkhito is well-positioned to become a cornerstone supplier of antimony to Western markets. As antimony's strategic importance accelerates across the defence, energy storage, and electronics sectors, KTA holds a clear first-mover advantage in Georgia, home to one of the few globally significant, high-grade antimony-gold deposits outside of China or Russia. Located at the intersection of Europe and Asia, Georgia offers direct, efficient access to both markets through established road, rail, and port infrastructure. In a world increasingly defined by geopolitical fragmentation, Krakatoa is well placed to benefit from the friendshoring of supply chains. Georgia provides a low-cost operating environment, characterised by streamlined permitting, low labour costs, and a transparent, business-friendly regulatory framework. Backed by a management team with a proven track record of successfully advancing overseas exploration and development projects, Krakatoa is strongly positioned to unlock Zopkhito's full strategic and commercial potential.
Attractive valuation with significant upside
Our valuation of KTA underscores the company's significant re-rating potential, driven by its exceptionally high-grade Zopkhito antimony-gold project and strategic positioning within the critical minerals thematic. In our Base Case, we derive an equity value of A$28.7 million, equating to A$0.044 per share, while the Bull Case reaches A$32.7 million, or A$0.050 per share. This implies a 12-month upside of 339%-398%, with a midpoint target price of A$0.047 per share. The valuation is grounded in a conservative EV/resource methodology, incorporating appropriate discounts for early-stage risk and jurisdictional factors, while leaving additional scope for upside in Krakatoa's broader project portfolio.