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Blackstone Minerals Ltd (ASX: BSX) research report

Blackstone Minerals is developing the district scale Ta Khoa Project in Northern Vietnam where the company is drilling out the large-scale Ban Phuc Nickel-PGE deposit. The Ta Khoa Nickel-Copper-PGE Project has existing modern mine infrastructure built to International Standards including a 450ktpa processing plant and permitted mine facilities.Blackstone also owns a large land holding at the Gold Bridge project within the BC porphyry belt in British Columbia, Canada with large scale drill targets prospective for high grade gold-cobalt- copper mineralisation.In Australia, Blackstone is exploring for nickel and gold in the Eastern Goldfields and gold in the Pilbara region of Western Australia.


Ta Khoa Ni-Cu-Co-PGE District: The geotectonic setting is strongly analogous to that displayed by some major Ni-Cu deposits such as Norilsk and Jinchuan. Both of these are located on major breaks between lithospheric plates, associated with deep, mantle-tapping structure allowing the ascent of mantle melts and formation of Ni-Cu-Co-PGE deposits.
Main Mineralisation Types:

  • The massive sulphide veins (MSV) occur in the major shear controlled veins. At Ban Phuc, previous owners mined 975kt of high- grade ore at average grades of 2.4% Ni & 1.0% Cu from an average vein width of 1.3m, producing 20.7kt Ni, 10.1kt Cu and 0.67kt Co.
  • The disseminated sulphides (DSS) are present within the Ban Phuc intrusive body with nickel grade typically ranging between 0.5% and 1.0% Ni.

Two-Fold Strategy: BSX is exploring / drilling for DSS to build tonnes and nickel units as well as for MSV to increase head grade.
Back of the Envelope Mining Inventory: Ban Phuc/ King Cobra Zone DSS = 40 Mt at 0.52% Ni; Ban Chang MSV (assumed similar to pre-production Ban Phuc MSV = 1.6 Mt at 2.2% Ni
Mining Scenarios: The DSS mineralisation is assumed to be mined by open pit with a strip ratio of 2.5:1 and the MSV mineralisation is assumed to be mined underground (capex US$12m).
Processing Scenarios: Throughput increased to 4Mtpa for US$100 million capex or early restart with existing capacity (capex US$18m).
Ta Khoa Valuation: We have run two development scenarios under various nickel price assumptions and set risk factors to 30% and 70% respectively.
News flow: We anticipate several share price catalysts including further results from the drilling programs at Ban Chang and Ban Phuc, maiden mineral resource and scoping study for the Ban Phuc/King Cobra disseminated mineralisation, some possible additional massive sulphide discoveries in the Ta Khoa district.
BSX Valuation: As the company continues to build a new mining inventory in the form of DSS and MSV, it opens numerous development options. Our speculative value currently stands at A$176 million or $0.67 per share. With an established treatment plant and the upcoming milestones, BSX has the opportunity to quickly close the valuation gap with some of its peers such as Mincor Resources NL (MCR.ASX) with a current enterprise value of A$230m.


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