Corcel - Initiation of Coverage

Blue-sky battery metals exploration & flexible grid solutions are a compelling play on the decarbonisation of the global economy

Corcel is the old Regency Mines, a company probably best known for its vast PNG nickel laterite project Mambare which, on its own, was once valued at £40 million. It has been a bit quiet over recent years as the company has gone through a substantial restructuring since the previous Chairman was rather unceremoniously voted out by shareholders. The decks have now been cleared ready for a period of substantial growth. With James Parsons now at the helm and the 12 month “legacy clean up” phase behind them, investors can look forwards to the creation of a highly relevant vehicle.

  • Positioned to really benefit from expected price hike in battery metals

    The transition to a low carbon world has begun in earnest. Storage is needed for renewable energy to be a viable and stable source of energy, and hence the growing clamour for batteries and battery metals where a supply crunch is expected in the mid-2020s onwards with big structural price hikes.

  • Mambare poised to be a DSO nickel supplier to the large Chinese market

    A Mining Lease could be awarded in 4-6 months allowing a DSO operation, funded by a JV partner. Together with Wowo Gap, another big PNG nickel project that is coming to Corcel, this could create some M&A action.

  • Big opportunities as the UK switches to flexible power generation

    Corcel is investing in energy storage/renewable projects to provide critical services to the UK grid as it transitions from coal/nuclear generated power to renewables. The initial 100MW energy storage at Burwell, Cambridge is strongly backed by a major pipeline of projects that are under review.

  • Peer comparisons & industry metrics suggest an initial 141% upside

    Our highly conservative valuation begins to show the potential. We initiate coverage of Corcel with a target price of 3.19p and Conviction Buy stance.

  • RISK WARNING & DISCLAIMER

    Corcel is a research client of Align Research. Align Research holds an interest in the shares of CRCL. Full details of our Company & Personal Account Dealing Policy can be found on our website http://www.alignresearch.co.uk/legal/ 

    For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

Table: financial overview
Year to June 2019A 2020A 2021E 2022E
Revenue (£'000) - - - -
PTP (£'000) (2,608) (1,482) (1,080) (1,730)
EPS (p) (26) (2) (0.72) (0.59)
Source: Company accounts & Align Research

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