07 shares today announced the geological pre-survey results of the Madagascar tantalum-niobium-uranium mine the company intends to acquire. The results show that the mine is expected to have 34.75 million tons of ore, of which niobium pentoxide (Nb2O5) is 76440 tons, with an average grade of 0.22%; tantalum pentoxide (Ta2O5) is 12508 tons, with an average grade of 0.036%; and uranium (U) is 17373 tons, with an average grade of 0.05%. Based on the current prices of 1.65 million / ton of tantalum pentoxide, 300000 / ton of niobium pentoxide and 10,000 / ton of U3O860, the value of these resources is more than 55 billion yuan; compared with the average grade of mature mines in the international market, the grade of the mine is also very high, and it is expected that the operating cost will be relatively low in the later stage. We believe that the progress of mine exploration is a very basic and important step in the acquisition link of the company. in the later stage, once the acquisition is successfully completed, 07 shares will become the first listed company in China with large-scale tantalum, niobium and uranium ore rare and precious metal resources. in the future, the company is expected to have explosive growth in scale and performance growth.
Main points of investment:
Tantalum, niobium and uranium are rare metals with high concentration of global resources, scarcity of domestic resources and high dependence on foreign countries. Global tantalum resources are particularly scarce. at present, the global proven reserves of tantalum resources are only 158000 tons of metal, 3 million tons of niobium resources and 5.33 million tons of uranium resources are rare resources. and the distribution and supply of resources are very uneven. At present, Brazil and Central Africa supply more than 65% of the world's tantalum resources; Brazil also supplies more than 80% of the world's niobium resources; and uranium resources are mainly concentrated in Australia, Kazakhstan, Russia, the United States and other regions. Domestic tantalum, niobium and uranium resources are scarce or have no economic mining value, especially the demand for tantalum and niobium resources mainly depends on imports.
The mine resources that 07 shares intend to acquire are rich in reserves and of high grade. Compared with the global tantalum reserves of 158000 tons and most global tantalum deposits of less than 10,000 tons, the company's target tantalum resources are rich in reserves, and the grade is as high as 0.036%, which is equivalent to the average grade of mines in international history or production. It has good economic mining value (the total reserves of tantalum and niobium in most domestic mines do not exceed 0.002%); niobium resources are also very high. In addition, we believe that with the further progress of late exploration, there is a possibility of further increase in resource reserves.
Calculation of resource value per share: assuming that this transaction is successfully completed, we take the current market price of various metal varieties, the mining life of the mine for 25 years, the recovery rate of 75%, the income tax rate of 25%, and the net interest rate of 50% (with reference to the current net interest rate of non-ferrous metal mines, the profitability of tantalum ore in Central Africa, considering the high grade and high by-product value of the mine). The resource value per share of the company is 25.431 yuan (undiluted share capital) Assuming 20 years of mining and a net interest rate of 60%, the corresponding resource value per share is 35.78 yuan.
Maintain a strong recommendation and raise the target price for 6-12 months to 50.00 yuan. To maintain the previous basic point of view, we have laid a good performance foundation for titanium ore consignment in 2013, significant progress has been made in the entry of rare metals into listed companies, and we believe that, optimistically, tantalum-niobium-uranium deposits may also contribute considerable profits to listed companies this year. For the time being, we are still based on the profit forecast based on the consignment of titanium products and maintain the EPS of 0.70yuan and 1.73yuan respectively from 2013 to 2014; taking into account the important progress made in the entry of rare metal resources into listed companies and the expectation that titanium-zirconium ore will enter listed companies in the future, we maintain a strongly recommended investment rating and raise the target price for 6-12 months to 50.00 yuan.
Risk hint: the progress of this transaction is slow.
