Blackstone Minerals (ASX: BSX) – Nickel Production Within 3 years?

Blackstone Minerals
  • ASX: BSX
  • Shares Outstanding: 254M
  • Share price A$0.29 (27.07.2020)
  • Market Cap: A$72M

Interview with Scott Williamson, Managing Director of Blackstone Minerals (ASX: BSX)

We’ve spoken to Williamson several times now. He’s a straight talker, but what about the value proposition of Blackstone Minerals? Is it one that investors should seriously consider?

Blackstone Minerals (ASX: BSX) is an Asian nickel player. The company’s primary focus is on exploring the Ta Khoa Nickel Project in Northern Vietnam. The project includes the Ban Phuc nickel mine, which operated an underground mine between 2013-2016 and has existing modern infrastructure including a 450ktpa processing plant.

Matthew Gordon talks to Scott Williamson, July 2020

The team features some decent names that are well known in the nickel space: Hamish Halliday (Non-Executive Chairman), Scott Williamson (Managing Director), Andrew Radonjic (Non-Executive Director), Hoirim Jung (Non-Executive Director) and Steve Parsons (Non-Executive Director).

Williamson and Blackstone Minerals believe that the value proposition of the Ta Khoa district and the Ban Phuc mine represents a unique opportunity to access a district-scale nickel PGE (Cu Co) sulfide project with existing infrastructure and a downstream nickel sulfate value-add opportunity. Moreover, Blackstone Minerals categories Asia as an ’emerging hub’ for EV Li-ion battery manufacturing.

Moving forward, Blackstone Minerals expects to have completed a scoping study and maiden resource for Ban Phuc by Q3/20. The total investment by previous owners exceeds US$136M, which generated US$231M in revenue over 3.5 years in spite of falling nickel prices. Ban Phuc has been on care and maintenance since mid-2016.

The company’s over projects include the GoldBridge Cobalt-Gold Project (Canada), the Silver Swan South Gold-Nickel Project (Western Australia), and the Middle Creek Gold Project (Western Australia). A “formal process” is underway for GoldBridge, and Blackstone Minerals is seeking a JV partner, preferably, a mid-cap/major gold mining company. Blackstone Minerals is also looking for spin-off/sale opportunities for its Australian assets in an attempt to monetise them. Williamson claims there is “a lot of interest” in the company’s gold portfolio.

It’s full-steam ahead at Ta Khoa. This is the clear focus for Blackstone Minerals. On April 22nd, it announced a share subscription deal with EcoPro, Korea‚Äôs largest cathode manufacturer. EcoPro is now a substantial shareholder in Blackstone Minerals, and this gives Williamson’s company access to some of the “best battery chemical engineers in the world.” With some concrete studies coming to the market in the near future, Williamson is keen to let investors know the company is still exploring and on the hunt for massive sulfides. The company will always to be a 90% stakeholder of the mine. Williamson has agreed on a 12-month deliverable timeline (9 months from now) for a PFS with EcoPro, which is extremely aggressive. The company will not be building a mine on the back of a PFS, but it will be building a partnership with EcoPro based on it. Will the company deliver on a PFS by Q1/21, followed by a bankable study a year later? Construction could commence at the mine by 2022, making Blackstone Minerals an accelerated nickel value proposition, but is it too much too quickly? Whilst nickel has been increasing in price over the last few months, is this timeline of development going to hit the EV-induced uptick at the right moment?

There are a variety of potential exit options. Value could be added via expanding the partnership with EcoPro, but Williamosin does not see a takeover as a viable option. He wants to create accretive value by turning this thing into a mine.

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Luckily, the January lockdown imposed by the Vietnamese government due to COVID-19 has resulted in just 360 recorded cases from 100m people, and Vietnam is still looking at a remarkable 5-6% growth of its GDP this year. As a consequence, Blackstone Minerals’ operations have not been affected whatsoever; if anything, the company is ramping up, aiming to increase on its 3 drill rigs and add an additional EM crew to unlock the massive sulfide opportunities. Blackstone Minerals has c. US$7M in the bank, and whilst the brokers would love to see the company raise more capital, at this market cap, the company doesn’t believe it would be the right thing to do. The burn rate is US$500,000 PQ, meaning this capital could see the company through for the next 12-18 months.

What did you make of Blackstone Minerals and Scott Williamson? Comment below and we will respond.

There are numerous articles and interviews on the Crux Investor platform relating to nickel or the EV revolution. Why not check some of them out?

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