VXR is likely to be a 5-Disallowed in the coming months. It's a...

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    VXR is likely to be a 5-Disallowed in the coming months. It's a story that the wider market had yet to grasp, so represents a huge opportunity for investors buying in now. It's the best greenfield copper play on the ASX IMO. Significantly undervalued with all the hard work already done.

    DFS has just been completed and has exceeded expectations.

    VXR's a Greenfield Copper/Zn mine with over 3% CuEq at 32kt per year that stands to generate $80m free cash flow. The pre-tax IRR is 51% at current prices. It's an open pit mine later converting to underground and has over 10 years mine life with potential to grow further.

    AJ Saverimutto has taken over as CEO this year. He's driven, highly respected and experienced, having on his CV: general manager of Grasberg (world's largest gold mine and second largest copper mine) and 8 years at Freeport. He's already found $20m savings for the CAPEX whilst increasing the plant throughout by 25%.

    This mine has been 10 years in the making with questions over pit design, metallurgy and resource all answered in the last year and all positive.

    Current market cap is a shade under $40m and NPV8 post-tax is $310 million.

    There are few copper mines being discovered and current grades are declining and strip is increasing. We are on the cusp of a rising Indian middle class, China's belt road infrastructure and the EV and new energy Revolution. All of these suggest copper demand will increase whilst it continues to get more expensive to get out of the ground.

    VXR could announce finance at any point in the next few months which will lead to a big re-rate. Analysts are coming out of the woodwork to cover the stock (I count 5 now with more to come) all with near term >50c price targets - the current price is 17c.

    A ripper of a copper play. Once finance is done, I see it shooting to 60c and heading to north of $1 as the mine is developed. 5 to 10 bags near term a likely scenario IMO.
    Last edited by mlives: 12/10/18
 
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