Nimy Resources Limited [ASX:NIM]
Metals & Mining
Highest-Grade Gallium Breakthrough in WA’s Newest Greenstone Belt
We initiate coverage of Nimy Resources Limited (ASX: NIM) with a 12-month midrange target price of A$0.21 – upside of +162% from the current share price of A$0.08. Nimy is an emerging exploration company in WA, currently focusing on establishing a maiden JORC resource for its Block 3 gallium project where it has discovered the highest-grade gallium intervals recorded in Australia i.e. up to 400 g/t Ga. Additionally, it continues to pursue exploration of copper, gold, nickel and other critical minerals.
Strong investment case with pioneering in massive discovery of highest grade gallium intervals
Nimy has made a groundbreaking discovery with the new Mons Greenstone Belt (90 km by 30 km), the first new greenstone belt found in WA in the last 20 years. The company has discovered highest-grade gallium intervals at Block 3 East which is a part of Mons project, with gallium concentrations ranging from 400 to 800 g/t within chloritized schist reflecting superior quality and has established an exploration target between 9.6 Mt and 14.3 Mt at an average grade of 39 g/t to 78 g/t gallium. This high-grade mineralization is superior to traditional gallium sources, which are typically byproducts of bauxite and zinc ore mining globally. The recent CSIRO study validates the presence of high-grade gallium in chloritized schist which implies that extraction process is expected to be simpler and costeffective resulting potentially in lower opex and capex requirements. Nimy has assessed only ~10% of the target area indicating significant potential of further discovery of gallium and other critical minerals i.e. copper, gold, nickel at its Mons belt (district scale greenstone belt). We expect Nimy to generate cash through the cycle from the potential of high output combined with low opex and capex requirements which highlights the strong investment case.
Gallium prices poised to benefit from supply chain disruptions and demand across industries
We expect demand and prices of gallium to rise supported by heightened need of supply chain diversification post China’s export restrictions and the increasing demand in end-uses across technology, renewable energy, and defence industry. The demand for gallium is predicted to grow at a CAGR of 24.5% (2025-2032). The market capturing opportunity is huge considering that China accounts ~ 98% of global gallium output and that supply diversification is utmost priority globally. We expect an upward trend in gallium prices in the future, a key catalyst for Nimy.
Valuation range of A$0.17– A$0.25 per share
To determine our fair valuation of Nimy, we apply peers-based avg. EV/ Resource multiple on estimated gallium resources of 11.95 Mt. Our valuation conservatively incorporates the further potential gallium discovery at Mons and Cu, gold, nickel discovery at Masson project. We highlight that our valuation is conservative given that NIMY's vast and prospective greenstone belt contains multiple Masson style deposits in the northern section of the tenement.