Erin Ventures - The Stuff for the Peace Energies
lithium, cobalt, nickel; these are all metals that are on everyone's mind in relation to climate change. In the meantime, everyone interested in the stock market is aware that the demand for these raw materials has in some cases already exceeded the existing supply in recent years. But hardly anyone knows about the elementary element boron, which has a wider range of applications than any other element due to its physical properties such as hardness, lightness or heat resistance.
Around 50 kg of boron alone is installed in an electric car, and more than 6,000 kg are in the blades of an offshore wind turbine . In addition to the increasing demand from the alternative energy sectors, the largest demand so far has come from the glass industry with around 25%. Other important uses are insulating glass, enamel and fertilizers. bleaching and cleaning agents. Due to the increasing global population, the demand in the agricultural industry is likely to explode in the coming decades, because around 3 kg of boron are needed as artificial fertilizer per hectare of agricultural land in order to cultivate the fields more efficiently. In a study, Credit Suisse assumes that the demand for the elementary substance with the atomic number 5 will increase tenfold by the middle of the century could.
New player with significantly better salaries
The demand for boron is increasing enormously, but the supply is limited and, together with a few smaller players, is more than 80% determined by two producers. With 73%, almost three quarters of the drilling reserves are in Turkey, which are processed by the Turkish state company Eti Maden. The mining giant Rio Tinto refines another 30% in the Mojave Desert in California. As early as 2017, boron was listed by the European Commission as a critical material, so local deposits in Europe are being sought to limit dependencies.
Erin Ventures, a Canadian exploration company, has been drilling for the critical resource since 2010 at the 306-hectare Piskanja project in Serbia, some 20km from the Kosovan border. Erin Ventures, which is about to change its name, is the only pure publicly traded boron company with a market capitalization of approximately EUR 9.26 million. The project is situated in the midst of a first-class infrastructure with year-round traffic, electricity and mobile network as well as access to a railway line.
Tenfold possible
With the published results of the updated economic assessment (PEA), the potential has now been clearly highlighted once again. Mineral Resources at Piskanja are 7.2 Mt grading 34.6% B2O3 (boron trioxide). In a peer group comparison, the two producers Rio Tinto with 24% and Eti Maden with 26% offer much weaker salaries. Overall, the PEA resulted in an after-tax NPV at a 10% discount rate of $524.9 million. The internal rate of return IRR after tax is 78.7%, which is based on a solid calculation basis. The initial capital cost for the 16 year mine life is estimated at only $79.9 million including 30% unpredictability.
Analysts see extreme upside
With regard to the results of the PEA, the analysis house MMG Capital evaluated both the project and the company Erin Ventures. 50% was deducted from the capital value, as the joint venture partner Temas Resources takes over half of the company with the project financing of EUR 10.5 million. The value is then CAD 338 million. Taking into account the country and project risk, another 50% was discounted. This leaves Erin Ventures valued at $122.3 million. or $0.79 per share, which would represent a more than tenfold increase relative to the current share price of $0.075. With regard to the demand for boron, the company is therefore a highly interesting long-term investment at a more than attractive level.
With regard to the climate change and investments in renewable energies, there are interesting long-term entry opportunities at a corrected level. According to the current PEA, the boron producer Erin Ventures has a tenfold potential.