Venture Minerals Limited [ASX:VMS]
Metals & Mining
Building on successful exploration results
Venture Minerals (ASX: VMS) is an Australian mining company focused on the development of the Mount Lindsay Tin-Tungsten Project in northwest Tasmania, one of the largest Tin-Tungsten deposits in the world. Venture’s Riley Iron Ore Mine in Tasmania is also being maintained in a restart ready condition, for when iron ore prices become consistently economic. In addition, the company is looking to potentially define maiden, high grade and large REE resources at its Brothers Clay Hosted REE Project in WA in the short term. Venture is also exploring copper, nickel and PGE resources through a JV with Chalice Mining in Venture’s “Julimar lookalike” South West Project in WA.
Maiden, large and high-grade REE resources in sight
Venture is completing a resource definition drilling at Jupiter Prospect within the Brothers REE Project in WA. Given the average REE grade of well over 1,500ppm TREO from the first RC drilling program at Jupiter and the massive size of the prospect, we expect the ongoing resource definition RC drilling program at Jupiter to potentially lead to a definition of maiden high-grade clay hosted REE resources at the Brothers REE Project in the short term.
Exposure to a range of commodities with increasing demand
Venture has obtained exposure to various commodities that are the full beneficiaries of the ongoing decarbonisation megatrend. Tin’s demand to make solder is rising as the EV revolution has increased the number of electrical components manufactured and, therefore, the solder required to create those components. Demand for REEs is soaring by the elements’ usage in the creation of permanent magnets used in wind turbines and electrical engines. Demand for nickel is increasing due to its use in the creation of Lithium-ion batteries, demand for copper and iron ore is rising by the electrification megatrend and the infrastructure required to make the energy transition possible. And demand for tungsten is soaring due to its application in military equipment and the increased international defence spending due to the rising geopolitical tensions.
Valuation range of A$0.027–0.031 per share
Our asset-based comparable valuation methodology yields a target price range of A$0.027-0.031 per share, representing a 25% drop from our initial valuation range of A$0.036-0.041 in May 2023. This is largely due to a higher number of shares on the issue now as a result of a recently completed capital raising. However, it is of utmost importance to note that our current valuation range does not consider Venture’s substantial progress on the REE exploration front since our initiation report. A definition of maiden, large and high-grade clay hosted REE resources at the Brothers REE Project will potentially make significant enhancements to the company’s valuation. The key risks to our investment thesis remain commodity price risk, funding risk and project delay risk.