Corcel – Acquires 40% of the shovel ready Tring Road 50MW gas peaking project – valuation with disjoint with MAST becomes extreme.

May 10, 2021 | Posted by

By Dr. Michael Green

The rapid speed of developments at Corcel’s flexible grid solutions division seems to be unabated in the creation of a really serious business. The latest move sees the company acquiring a 40% interest in the shovel ready Tring Road 50MW gas peaking project, located  outside of Aylesbury, from Arlington Energy Limited (AE).  Further to this, Corcel also intends to look at co-developing and funding additional flexible energy assets with AE, which are expected to cover the full gambit of energy storage, gas peaking and solar projects in the UK.

Corcel and AE have agreed to take the Tring Road project through to financial close later in 2021. The purchase consideration of £400k will be satisfied by £150k in cash and £250k in shares at roughly 2.08p each, with a 6-month lock in. This will result in AE becoming the second cornerstone investor in the company, alongside the Chinese owned Sinom Group. This can be seen as giving Corcel material additional exposure to its existing UK flexible energy storage and production portfolio.

At the time, Chief Executive Officer, Scott Kaintz commented that: “This is a highly significant milestone for Corcel. The addition of the “shovel ready” Tring Road project to our existing Burwell project dramatically bolsters our position in the increasingly competitive flexible energy space here in the UK.  We believe that gas peaking assets of this nature are essential to assist the transition to renewables and will provide significant trading margins given the variability of renewable energy production and the inherent volatility of UK energy demands.  I am also excited by the opportunity of exploring a broader strategic partnership with Arlington Energy, which, if agreed, would provide Corcel with additional AE flexible energy investment opportunities.” 

Corcel and AE have effectively formed an industry standard joint venture to operate the project and plan to jointly arrange the funding for the project over the coming months, targeting financial close later in 2021.  As things stand at the moment, AE will continue to lead the construction and operation of the project.  The joint venture partners intend to procure a development fee at financial close as well as an equity carry as part of ultimate arrangements negotiated.  On top of this, Corcel expects to get a 3% fee to cover all equity funding arranged.

Tring Road seems to have all the makings of becoming a cracking project, being a 50MW gas peaking project which lies just 40 miles NW of London. Importantly, the project is shovel ready. Firstly, a 50MW grid connection has already been secured, which will allow electricity to be exported. Secondly, a binding option to lease has been signed with the landowner. Thirdly, planning permission has also been secured. As a result of Corcel’s comprehensive due diligence on the project, third party estimates have suggested annual gross margins of between £103-147k per MW/per annum when the project is operational.

Corcel offers investors an enticing mix of battery metals interests along side the flexible grid solutions. There is big value to be had in the battery metals interest which includes its vast Papua New Guinea nickel laterite project Mambare which on its own was once valued at £40 million. Mambare is being recrafted into a DSO nickel supplier to the large Chinese market for stainless steel. Plus, there is also the Wowo Gap Nickel Cobalt Project, just 250km away, which the company is close to getting it mitts on. Here, Corcel could double the group’s nickel resources, which may well spark a material stock increase in our view.

The dramatic shift from fossil fuel plants to a lower carbon generation model is creating huge opportunities for the supply of continuous uninterrupted supply of base load electricity which Corcel is addressing. Last month saw the arrival of a comparable stock on the market with the IPO of Mast Energy Developments (LON:MAST). At that time we looked at how Corcel compared and revisited our target price for the stock.

Mast has a portfolio of small-scale power generation assets. At IPO, the company planned to develop at scale and pace, rather than a project-by-project basis, and plans to advance rapidly towards significant revenue generation. At that stage, Mast had c.9 MW immediate production capacity and should have c.20 MW in production capacity within the first six months from listing. In addition, Mast also had another c.20 MW in production capacity over the then next six months; plus, various other shovel ready sites have already been identified in the UK.

The pre-new money valuation of Mast was £18 million on listing. Well, it looked as though Corcel’s 100%-owned Burwell Project, which is 100MW (50MW of energy storage and 50MW of solar), very neatly trumped Mast’s portfolio. At IPO, Mast appeared to have between 9MW and 20MW of projects in its portfolio which are really advanced.


Project 1


Project 2

Project 3

Installed electricity generation capacity


at IPO



6 months after IPO

Total electricity generation capacity




Pre-new money valuation




Valuation per MW




50% discount




Valuation per MW for MAST. Source: Align Research

Valuations per MW for Mast range from £3.6 million to £0.9 million. Even taking the lowest figure and discounting it by 50%, to remain conservative, suggests a valuation of £45 million for the 100MW Burwell project. On that basis, plus adding highly conservative valuations for the battery metals interests, we determined an updated target price of 12.91p for Corcel.

The acquisition of a 40% stake in the 50MW Tring Road Project gives Corcel an additional attributable 20MW to throw into the mix. All of which continues to show the giant disconnect between the valuation paid to Corcel and that for Mast – something we have taken advantage of and that we recommend our followers do too. With Corcel shares currently sitting at 1.625p, we are more than happy to reconfirm our Conviction Buy stance.


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