Corcel - Update

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

Corcel is best known for its vast PNG nickel laterite Mambare Project which 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 removed by shareholders. The decks have now been cleared and a period of substantial growth has begun. With James Parsons now at the helm and the 12 month “legacy clean up” behind them, investors are now witnessing the creation of a highly relevant vehicle.

  • Positioned to benefit from expected price hike in battery metals

    The transition to a low carbon world needs grid level storage for renewables to be a viable and stable source of energy. Hence we are seeing investors clamor for exposure to batteries and battery metals where a supply crunch is expected in the mid-2020s onwards with big structural price hikes.

  • Mambare is positioned to become a DSO nickel supplier to China

    A Mining Lease could be awarded within 4-6 months allowing a DSO operation to proceed, funded jointly with a JV partner. Together with Wowo Gap, another big PNG nickel project that looks like it is coming to the Company, Corcel is set to become a major nickel-cobalt player in the region.

  • 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. Already, the team has 170MW of well-advanced projects, strongly backed by a major pipeline of projects that are under review.

  • Peer comparisons & industry metrics suggest 900% upside

    Our conservative valuation begins to show the potential. We update coverage of Corcel with a target price of 19.35p and Conviction Buy stance.

  • RISK WARNING & DISCLAIMER

    Corcel is a research client of Align Research. Align Research own shares in Corcel. 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 (£m) - - - 2.1
Pre-tax (£m) (2.6) (1.48) (1.08) 0.37
EPS 9p) (26) (2) (0.72) 0.10
Source: Company accounts & Align Research

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