Blenheim Natural Resources – Initiation of Coverage
Resources investor developing blockchain, cobalt and lithium interests which represents a potent cocktail in today’s market
Blenheim is the former AIM-listed coffee roasting business Coburg Group. The original business was sold off in 2012 and new blood has since joined the boardroom to set about turning the company into a natural resources investor. This transformation shifted up a gear in 2017 and now the company has substantial interests in a series of compelling projects, some “closeology” plays and where substantial value could be added in 2018.
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Key events early in the New Year, with news expected on the cobalt licences
Blenheim is awaiting news on the granting of exploration licences in Cameroon. These border the world-class Nkamouna and Mada Cobalt-Nickel Project which the government is expecting to re-tender in early 2018 and which will attract the spotlight to anything cobalt related in Cameroon.
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Lithium play on the doorstep of the high grade Goulamina deposit
The company has a 30-40% interest in some Mali licences which share a border with ASX-listed Birmain’s Bougouni Lithium Project with its world class Goulamina lithium deposit and AIM-listed Kodal Minerals which has been announcing some impressive lithium grades and widths.
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Backing a blockchain/AI business that looks set to launch an ICO
Blenheim recently announced an investment/collaboration agreement with BrandShield to develop blockchain solutions for the resources sector and provide support for commodity focused ICOs. Both blockchain and battery metals are currently attracting rising attention from small cap investors.
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Peer comparisons and earnings multiples suggest an upside of 127%
Our analysis shows that the stock is under-priced. We initiate coverage of Blenheim with an initial target price of 1.19p and Conviction Buy stance.
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DISCLAIMER & RISK WARNING
Blenheim Natural Resources is a research client of Align Research. Align Research & a director of Align Research own shares in Blenheim Natural Resources. For full disclaimer and risk warning 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.
| Year to March | 2016A | 2017A | 2018E | 2019E |
|---|---|---|---|---|
| Revenue (£'000) | - | - | - | - |
| Pre-tax (£'000) | (235) | (295) | (497) | (397) |
| EPS (p) | (0.23) | (0.13) | (0.0001) | (0.00003) |