Our Order Pad | Australian Potash Company (APC:ASX) & Blackstone Minerals (BSX:ASX)

HOSTS Candice Bourke & Felicity Thomas|12 November, 2021

Meet your hosts

  • Candice Bourke

    Candice Bourke is a Senior Investment Adviser at Shaw and Partners with over six years' experience in capital markets and wealth management, specialising in investment advice including equities, listed fixed interest, ethical investing, portfolio risk management and lombard loans. She discovered her passion for finance and baguettes, when working and living in France, and soon afterwards started her own business (all before the age of 23). Candice is passionate about financial literacy for women which lead her to co found Her Financial Network, and in her downtime, you’ll find her doing any of the following: surfing, skiing, reading a book by the fire, or walking her black lab, Cooper, with a soy cappuccino in hand.
  • Felicity Thomas

    Felicity Thomas is a Senior Private Wealth Adviser at Shaw and Partners with over nine years experience in wealth management and strategic financial planning, covering areas including Australian and Global equities, portfolio construction and risk management, bonds, fixed interest, lombard loans, margin lending , insurance, superannuation and SMSFs. Felicity started her career in finance at BT Financial Group, speaking to customers about their superannuation and investments. This led to the realisation becoming a Financial Advisor would be the perfect marriage of her skills and interests - interpersonal relationships and economics. She is passionate about improving women’s access to financial resources and professionals, and co founded Her Financial Network. On the weekends you’ll find her on the beach, or going for an adventure with her black cavoodle, Loki.

It’s time for Felicity and Candice to look at their Order Pad, where they reveal what’s on their respective desks, and talk through the research, analysis and thought process behind their ideas. Candice continues her theme of going long on potash, and takes a deep dive into home-grown micro-cap resource company called Australian Potash Company. Then Felicity outlines her thesis for another micro-cap, that she thinks you won’t have heard of: Blackstone Minerals. She outlines the fundamentals of this company that is operating in one of her favourite investment thematics, being the EV and Li-ion battery space.

Follow Talk Money To Me on Instagram, or send Candice and Felicity an email with all your thoughts here

Felicity Thomas and Candice Bourke are Senior Advisers at Shaw and Partners, and you can find out more here

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In the spirit of reconciliation, Equity Mates Media and the hosts of Talk Money To Me acknowledge the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander people today.

Candice: [00:00:03] Hello there, and welcome to talk money to me, I'm Candice Bourke 

Felicity: [00:00:06] and I'm Felicity Thomas and this is your need to know wealth podcast where we make the complex simple. 

Candice: [00:00:12] So we are back once again with our order pad episode. Woo hoo. And in these episodes, if you haven't caught on to what we do here, let's tonight both pitch a company that we are liking at the moment and we go through the investment reasons for those businesses. [

Felicity: [00:00:27] And one of the reasons why we created this podcast is to actually help educate you on all aspects of your financial landscape. So Candice and I actually draw in our extensive expertise and experience in wealth management and capital markets to deliver you clever and insightful financial conversations amongst ourselves and our special guests. 

Candice: [00:00:45] That's right. So if you can't tell already, we're super passionate about financial literacy and helping educate you along your investment journey, wherever that is. So in terms of today, we'll be chatting about two very interesting emerging growth companies that both fall within the future facing commodities space. I'm not talking about travelling to space, I'm more referring to the future commodities. So the exit from traditional resources and the move towards more renewable and sustainable commodities that we need in our daily lives, right? So this is we're talking nickel, lithium coal, right, and potash. 

Felicity: [00:01:22] And even though we are registered financial advisors at Shaw and Partners, please note that this podcast and the content discussed does not actually constitute as financial advice, nor is it a financial product. The content on this podcast is general in nature, and you should seek appropriate professional advice before making any financial decisions. 

Candice: [00:01:40] So with that being said, all the companies we're going to be chatting about on our show today are offered in good faith based on the facts known at the time and don't contain all the relevant information in respect to the financial products to which they relate. 

Felicity: [00:01:52] All righty. So good work on that. Now Candice now we're actually making this recording on the 1st of November 2021. So we wanted to give you a quick update on how two of our stocks are performing. We're just going to give you the top two today. So we've got Nitro at ten point nine, eight percent and SVB at seven point ninety eight percent. And you can actually track our order pad by going to the Equity Mates website. Clicking on the watch list and clicking on our wattpad. So I'm going to get you to kick us off today. Candice with your pick. I mean, what company have you on Earth this week for us to add to our water pad? It's nice to actually have more than three stocks on it now, isn't it? 

Candice: [00:02:30] It is growing. It has, indeed. Okay, so I'm actually going to continue to go long in my investment thematic of potash. If you tuned into our last episode of the order pad, I was super keen on BHP in particular because of their investment in that potash space. So for a quick refresher, potash is potassium carrying fertiliser, which contains no substitutes. So very clean version, right? Potash is one of the key nutrients required for the global crop growth, production and supply chain in the whole agricultural sector. Industry consensus places potash demand to forecast to grow anywhere from two to six per cent over the next coming decades, driven by the reduction in basically available land per capita over time. So it can 

Felicity: [00:03:16] actually help to the growing, I guess, food shortage. Is that right for the land? 

Candice: [00:03:20] Yes, 100 percent. So we know, like as I talked about in the last launch pad, you know, BHP is forecasting we're going to have a huge amount of demand and supply stress on a global food market. So it's estimated that demand for potash could double by the late 2040s, by which point it could be US 50 billion market cap and opportunity ready. Yes. So the company I'm pitching today is the Australian based micro-cap resource company that specialises in potash in it's called the Australian Potash Company. Very original name. 

Felicity: [00:03:53] He has about to say, not forget that one. 

Candice: [00:03:56] It's pretty self-explanatory what this company does. And if you're googling it or looking up on your Bloomberg app, the the ASX code is APEC. So APEC, right? What does it do? Well, as the name says, it's a sulphate of potash, which is SOP. It's a developer in this space, which holds 10 year across three areas in Western Australia's Northern East Goldfields. So this is nearby Kalgoorlie. If anyone was tuning in consisting of four projects, so number one, they have their Lake Wells sulphate potash project. That's the main project I'm going to be talking about today and the reasons why I like APEC. Then we have the Lake Wells Gold Project, the Lantern's downed base metals project and finally their Lake D'alerte Essop exploration project. So as mentioned, we're recording today's episode of the first November market cap right now 74 million. So definitely microcap. And I'd put this in the high risk category as well, because APEC are only 30 per cent complete towards being a bank. Feasible study, so that means in layman's term, they're pretty much still a junior miner exploration company. They're still in ramp up phase, really at the end of the day. 

Felicity: [00:05:09] Awesome. I mean, that's like a tiny, tiny micro-cap that's smaller than a lot of the ones that I've even pitched. 

Candice: [00:05:15] I know I'm going into your territory here. You're going right, grey cap. You're doing right. 

Felicity: [00:05:20] All right. So I really like that. That's super interesting. I mean, if you find these companies early, that's where you can get some significant upside. But we know there's also a lot of risk right in these baby companies. So tell us more about like the Lakes Wells project, because you said that's what you want to actually highlight. 

Candice: [00:05:36] Yeah, and that's why I'm going rogue or off script for my normal, fundamental kind of investment preferences. And that's because the Lake Wells project itself, I think, is their biggest opportunity for right now. So they own 100 percent of this project. That's a tick in my book. They don't have any other royalties to deal with, and it's a 30 to 35 year mine life producing site of one hundred and seventy million tons per annum of premium soap. So long life in the mine. Really good product as well, and they earn 100 percent. So the site's still progressing and de-risking, as we know. But these are good signs and there's early work sites that are continuing. So using our base case realised SRP price of the project, you know the projects predicted to have a post-tax NPV of 231 million or an eye of 17 percent. So again, spot prices. The project has a post-tax NPV of 620 mill, which then translates to longer term internal rate of return of 29 percent double digits around. Love that. And not only does the growth outlook and financials look attractive, but it's also an ESG play. So the Lake Wells project will be a genuinely, I'm going to say that again, so we really understand it. It's generally going to be a green product. It's not just going to be market is a green product. It will be an ESOP product, given that it's going to be producing 66 percent less CO2 emissions and peers and a premium fertiliser product for distribution in the world's most lucrative markets. 

Felicity: [00:07:12] That's fantastic. That's really great to actually say something that is going to be genuinely green, rather than just a lot of these companies jumping on that green 

Candice: [00:07:21] bandwagon 100 percent. So it's also going to have the lowest quartile cash costs and backed by a highly penetrable hybrid renewable power station, which is also 60 percent going to be more efficient than its fees. So double take, it's essentially these high grade premium soap product with a 35 year lifespan. And it's the talk of the town at the moment and in terms of their debt of financing, which they're looking to do in a few months time. They're in talks of securing a green loan from major banks and finance companies, which is exciting. Awesome. It's important to note that, you know all these awesome things, you know, it's still based on our assessment of APC, so the key components of the model right for them. Getting these targets is producing 170 million tons per annum of sap over that 35 year lifespan. Total capex expenditure of 292 million opex of U.S. 251 ton over the lifespan of the mine, which is in the first quarter. And so we're assuming really full production ramp up in calendar year 2024. 

Felicity: [00:08:28] So really, this is a two to three year investment play. Then, you know, potash has recently been in the press a lot lately, and yet it's still very under loved future commodity and investment really up until now until you've kind of been talking about it lately. Do you know why that is? You know, battery lithium? That's so hot, hot, hot nickel, copper, but not potash. 

Candice: [00:08:51] I mean, I'd love to say that because I've found it now it's hot. But that's not the case. Not, you know, it's not first to market on this idea, in our view, one of the reasons why institutions and you know, investors are hesitant to buy into the Australian potash sector, despite the fact that it's up 45 per cent in the spot price since July is really because of the difficulties at the Salt Lake potash and Calcium Lakes area. So if you look them up, that's coal on the ASX market. And so for is the ticker for the other company. So whilst Esso for you may have seen in the press recently, that's actually just been appointed into voluntary administration by KPMG. That's not good. Not good. But our internal challenges and checks of the whole sector, you know, part of the day when you look at APEC as you look at the piece, what that's indicating is coal will reach steady state production, meaning they're managing their technical issues much better. So that's a good sign. Both K L L and S 04 have encountered difficulties with the Bryan instruction production of harvesting their salts. And just the general project execution. But if you look at like the global markets, you know, you can use these technical types of solar salt projects. It's been proven by numerous operations over the over the many decades. So we believe APC's approach to the Lake Wells project and development is actually quite conservative, which is good, right? You want to under-promise and overdeliver. So APC is forecasting in there to some as of the pond evaporation prior to commissioning. This is good. That's conservative. This is going to ensure that this is sufficient, you know, to have enough quality of the harvest salts to feed the process, plant their brine ball field abstraction is used, which we believe carries less technical risk compared to the Salt Lake trenching, which is what appears to which, you know, taking a lot of stress on that side of things. And then they also have an engineering, procurement and construction, or an EPC contract, which basically has laid out more than 75 percent of the construction contracts by value costs, scheduling and performance. So they know what they're getting in for before the projects start to really ramp up in terms of cost. 

Felicity: [00:11:13] OK, so that's great. So you don't believe that APC is going to have the same issue as these other companies, essentially. You know, what do you consider a good quality source of potash? Yeah. 

Candice: [00:11:25] Well, firstly, it's important to explain how exactly you source and extract potash. A lot of people don't realise that potash is produced at the underground mine level, so you're actually mining, right? And it's driven from solution mining operations and through the evaporation of lakes and subsurface brines, which is salts and the two most common forms of potash MIP, which stands for Muradov potash or soap. And we're talking mainly about sulphate of potash, right with APC. So like lithium potash deposits, they're not actually rare. There's a lot out there in the world, but it's estimated that the globe has an existing reserve life of over 90 years of potash. However, most deposits are either too small or low grade to be considered commercial. So to answer your question, the factors which influence commerciality and you know what determines a good source of potash would firstly be size and the reserves available. So the reported range of tonnages for the commercial potash deposits ranges from at tens of millions to more, like 100 billion tonnes. So, for example, in the Canadian region that we were talking about with BHP, they have a huge reserve in other areas which have large reserves. That we're probably familiar with is basins in the Rue's basins in western Russia and also in other markets in Germany. The second point you want to look for is the grade. So the mine ability percentage in the K2 right, which is the chemical. So the average reported potash grades in the reported crystalline deposits, which is about 80 per cent of my production. That ranges from anywhere from five to 40 per cent K2. And the most reported grades in operating mines today range from anywhere from 10 to 25 per cent K2, with the lowest association known in terms of what we can see from the analyst perspective is below four per cent K2. Thirdly, you want to look for the cost of mining and the cost of producing. That's a bit of a no brainer. You know, we're talking about the depth to the or the thickness, and you know how the potash bed is really made up the amount of impurities present. You know how much you have to get rid of that, the cost to separate, et cetera, et cetera. And then finally, location, location, location, location, the deposits distance from the markets that's going to determine the cost of your transpiration. You know what governments you playing in what tax royalties, proximity to power and water? These are all important things to look out for to determine a good source of potash. 

Felicity: [00:14:06] Okay, so thank you for explaining that. I mean, who do you think are the biggest, I guess, competitors in your view to APC because he's spoken about the positives, but obviously there's risks, right? 

Candice: [00:14:16] Always risks investing. We're not naive about that. So, you know, with with Canada in particular, which is BHP, the biggest producers globally in this race, currently Canada's winning Russia, Belrose China and Israel. So the Elk Basin in Saskatchewan, Canada, is the world's largest source of potash, which is where BHP is investing. So really no brainer there to answer your question. BHP is for sure a competitor. When you when you're comparing it to APC and that area actually has produced 20 per cent of the world's potash supply for the last 50 years, well, that's quite. That's why they had number one in the rice and then other familiar names who are mining potash. Is Rio Tinto, to name one in Australia and a few other global competitors out there, so you've got the Mosaic Company, M.O.s on the New York Stock Exchange, if you look in that up, it's about a 20 bull market cap and then a smaller company on the Canadian market called Lithium America's allies say. So there's definitely competitors out there, right? But there is a geographic potash supply demand imbalance going on in the market currently. So while the Earth contains enough potash to meet the increased global demand for crop production today, some regions lack potash deposits needed to satisfy the local demand. So the top four potash consumers in the world currently is China, Brazil, the U.S. and India. And they actually account for 60 per cent of consumption. But these countries are only producing 13 per cent of the global potash production. 

Felicity: [00:15:51] Okay, so what you're saying here is they actually dominate the market, but they aren't supplying enough. [

Candice: [00:15:56] Correct. And this geographic imbalance has created a fragmented potash market in general, with transport costs and production qualities causing pricing differences across the world. 

Felicity: [00:16:07] So that's why you're seeing APEC as an investment opportunity right now. 

Candice: [00:16:10] Yeah, in our view, APEC is well placed to capitalise on this imbalance. But as the company intends to produce a premium quality soap and has jurisdictional advantages given that its key assets located in Australia. So Australia, as we know, has proximity to the emerging Asian markets. Fantastic. It's going to supply China and India in particular, right being close to us, which 

Felicity: [00:16:35] have huge populations. So that makes sense 

Candice: [00:16:38] and massive demand on the agricultural sector. Mm-Hmm. So as I've mentioned, APEC owned this site 100 percent, 35 year mine life cycle, and it's Australia's largest measurable SAP resource area, which they've already actually been granted their mine leases and environmental approvals so that regulatory risk and hurdle has already been achieved.

Felicity: [00:17:00] Okay, awesome. So that sounds all really exciting, but I know that everyone here just wants to get to the exciting part. I mean, where do you see the stock price moving to? You know, what kind of upside is there? 

Candice: [00:17:09] That's right. This is this is the fun part, right? So upside. Big, big, big numbers. Yeah, triple digits of 176 per cent upside, which is a Shaw and Partners 12 month price target to reach 32 cents. Last trade was about 11 and a half cents, just y for everyone. And also Canaccord follow APC and their 12 month price target is 30 cents. Now, as we're chatting about APC today, it's actually in a trading halt in the market because they're currently raising eight million at eight cents, being a 30 per cent discount to the last traded price of one and a half cents. So we're a little bit restricted on what we can say here, but we know that the raise is done purely through wholesale, sophisticated investors only and the post raised capital market will be about 60 million, with cash at Bank Pre, the raise of about 2.9 million as of the 30th September 2021. [00:18:01][51.9]

Felicity: [00:18:02] And what are the funds going to be used for? Why are they raising eight million? 

Candice: [00:18:06] So they're raising the eight million for the Lake Wells project. They're going to be doing some battlefield field drilling. They're testing, pumping and earthworks and just general capital. So as I mentioned earlier, the APC contract is really mapped out over costs they'll need. This is just the next phase of the project. So in summary, APC is a buy recommendation, in our opinion, for those reasons that I mentioned earlier. But I just want to leave you with a key point, Felicity. And for our listeners, this is why I get excited about APC. And that's because the company expects to raise product prices to include a 10 per cent premium inequality above their peers because they can market it as a genuine green product, right? As as we mentioned earlier. And then they have a higher Cato content than the standard soap. So really, it's a premium, more green product product that we know the global food supply chain just has a lot of demand for it in the coming few decades. You know, in our view, also, it's a really well-run business by the CEO and Matt, in our view. Also, the management is is super strong. LED by CEO Matt Shackleton, Matt Scott over 20 years experience in this area and has actually been a listed board member of another WA Gold Explorer, Mount Magnet South. 

Felicity: [00:19:27] Well, that's important, right experience? 

Candice: [00:19:29] That's right, Felicity. So you know, I look for experience, I look for skin in the game. I look for, you know, when I go more speculative, high growth, like, can this be a two three year viable play? I think yes. And is it solving a problem? Yes. World food supply in the potash area. Alright, so that's a wrap on ABC for me. I'm excited to hear about your stock idea, Felicity, this week, but before we do, we're just going to take a very short break to hear from our sponsors. All righty, what stock is hot right now that you want to bring to the auto part, Felicity? 

Felicity: [00:20:00] OK, so my stock today is a company that you most likely haven't heard of. It's called Blackstone Minerals. Now the code is B.S. on the ASX. The company owns 90 per cent interest in the Takot and Nickel Copper PGA project. So the Tarkov project is located in the Sun LA province of Vietnam and actually includes an existing modern nickel mine. Again, it's a micro cap just like yours with 238 mill market cap, and it's trading around the 68 to 70 cents mark. And it's actually playing in one of my favourite investment thematics being a V and lie on battery space at its core. It's a battery metals development company focussed on the Asian market. It's a little bit of a summary. Blackstone is proposing a restart open pit mine in Band Fuch in northern Vietnam, previously owned by Asian Mineral Resources. Now this mine will have a greater upstream processing and knew extensive downstream processing to produce nickel, cobalt and manganese NCM, which are battery precursors product from hydropower for Asia's growing lithium ion battery industry. 

Candice: [00:21:05] Okay, so again, in the EV, you know, long lithium space, right? 

Felicity: [00:21:09] Yeah, that's it. You know, I think what's really interesting is the majority of current class one nickel demand is driven by non battery applications, so stainless steel alloy steel and plating. But the future demand for class one nickel is to be driven by rapid growth at the Lyon battery industry. 

Candice: [00:21:26] And that's definitely an interesting theme to be adding to your portfolio. So I guess why are you interested in more sodium B6 and the Asian market? 

Felicity: [00:21:35] Yeah. So I guess what I really like is that it is focussed in Asia, and we know that Asia is booming, especially Asia, China, with more and more the population becoming wealthier with a growing middle class. You know, Vietnam is closely located next to China, next to South Korea and next to Japan. So it's really the heart of Asia's rapidly expanding lithium ion battery hub. You know, you've got S.K. Innovation, Eco Pro Cattle, Samsung, LG Chem and Panasonic as some of the globally relevant cathode and battery manufacturers with their headquarters actually in this region. So I think what Blackstone is intending to do is to develop and fund the construction of the downstream business via a collaborative, partnership based model. So in our view, there's really no shortage of potential partners.

Candice: [00:22:19] And let's talk about the financials now. Let's get 

Felicity: [00:22:21] them out of the way because there's not much to it again right now, because it's not actually, 

Candice: [00:22:25] it's very speculative buy like both of our stocks, it sounds like. All right. 

Felicity: [00:22:28] Let's get the financials out of the way. Very similar to yours. There's not a whole lot to it. It's just a lot of assumptions and a lot of modelling. But they've got thirteen point five million cash as of the 30th of September. You know, they're not making any money just yet, but commercial production is expected in 2024. You know, in our view, the upstream and downstream projects have outstanding financial metrics. So using our base case commodity price deck, we model redevelopment of six million tons per annum at Tyco, our nickel project 90 percent with a post-tax NPV, 10 of us 193 million or that's an internal rate of return of 25 percent. So double digits, right? That's pretty good, although they may be material upside to our upstream economics if the resources can be expanded as well. So northern Vietnam may become a globally significant nickel province, and I think Blackstone has a first mover advantage now in this space. Now we modelled the development of a 400 kilo ton per annum nickel concentrate fed into Koa refinery, 100 percent with our post-tax NPV, 10 of US 4500 and internal rate of return of 52 percent. So the company is targeting a final investment decision in the second half of calendar year 22 following construction of a pilot plan, definitive feasibility studies and financing. And you know, we've modelled a phased ramp up operations with the first production in calendar year 2024 and actually steady state in calendar year 25. 

Candice: [00:24:03] So really apex calendar year 24, which is similar to to B6 as well calendar year 24, so both to three year place really is what we're talking about today. 

Felicity: [00:24:13] That's it. There's a lot going on in calendar year 2024. Yeah. 

Candice: [00:24:19] So stay tuned, folks later. 

Felicity: [00:24:20] But getting early because 

Candice: [00:24:22] you don't want to miss the boat and so behind Blackstone, you know, give us more of your investment thesis. Why you like the ideas? [00:24:27][5.8]

Felicity: [00:24:28] Okay, so that probably three main reasons why I believe you should be investing in Blackstone and why we have it in our order pad or in our portfolios. Again, you need to be a high growth investor. You need to be able to handle significant volatility. Number one reason is exposure to a rapidly intensifying green electrification movement, the green nickel movement, I suppose. Now, Blackstone provides this exposure to the EV battery thematic. It's once in a generation. An opportunity to position for the movement towards high nickel content cathodes needed for the EV revolution, and Blackstone is also very serious about producing an ESG friendly product. The company recently announced a collaborative partnership with Circuler, which is the industry leader in supply chain traceability. So ESG tracking promotes responsible sourcing and sustainability. This will help Blackstone and its global customers meet a range of stakeholder requirements which are rapidly evolving, i.e. regulatory financing and investment criteria.

Candice: [00:25:26] Okay, so what do you mean by exactly the term green nickel? 

Felicity: [00:25:29] Well, the goal is to launch the first nickel zero carbon battery product, essentially. So if you combined all of these I guess aspects yourself a nickel, you're vertically integrated value chain, your renewable power pressure, oxidation leach flow sheet, fossil fuel replacement and corporate commitment to ESG. It all points to words this, I guess, green nickel theory. 

Candice: [00:25:51] Yeah, okay, that makes sense. 

Felicity: [00:25:53] Now number two district scale nickel sulphide opportunity with significant existing infrastructure and competitive operating advantages. So I mentioned that briefly before to the flagship K coal mine in northern Vietnam has up to 25 massive sulphide by vein MSP and a disseminated sulphate DSC target. It's also got attractive product pricing, low risk investment jurisdiction and abundant access to renewable hydro power and competitive labour costs. So that's number two. Then I've got No. Three reason why this is a good investment idea in my investment thesis. Is it scalable and modular? And it's globally relevant downstream refinery. So Blackstone's intention is to collaborate with its one partners to unlock the value of its expanded downstream refinery strategy, initially in Vietnam, with the potential to enact a global strategy. That's why you know why I really like it. I like to look at a lot of potential. You know, the company has really good relationships as well. So some of the biggest players in the battery space, including a company called Eco Pro, which we actually invest directly for some of our clients, is an international investment. And look, we see big opportunity with Blackstone partnering with VinFast, which is actually Asia's answer to Tesla as they're seeking a local ESG solution for their batteries. So, I mean, to me, my eyes, it just lighting up at this right, 

Candice: [00:27:13] looking excited with all the growth plays. And I think what I was reading as well. VinFast is looking to list soon on the market, and they in particular have said that they want a local lithium battery provider, right? They don't want to have to source it from anyone else to keep their costs low. So that's a big opportunity. Like you pointed out for Blackstone, so ding. 

Felicity: [00:27:32] Ding, ding, 

Candice: [00:27:33] ding, ding, ding, ding ding. What about the risks, though? You know, we talk about risk all the time. What are the ones that you're saying for Blackstone, OK? 

Felicity: [00:27:41] There are quite a few risks, you know, like all investments and like all investments that aren't actually making any money yet. So I think the number one risk would be the Tarkov mine and downstream refinery and not yet producing. And there's risk that they may unable to be actually get into production, and the project cost may be more than expected to build, restart and not operate the way that we're expecting. You've obviously also got sovereign risks right in Vietnam. However, this refinery is actually expected to be a project of national significance and features in the national in the Vietnam National Master Plan, which is pretty cool. Nonetheless, economic challenges in country, you know, include access to infrastructure spending, public sector reforms, growing inequality in, you know, and a weak banking sector. Another risk would be the forecasting future commodity prices and operating costs have considerable uncertainty. So I guess similar to APEC. You know, we've got this kind of risk here. Our forecast may be potentially too optimistic if metal prices are weaker than forecast and or Blackstone Minerals mining costs are higher than, you know, we kind of expect our cash flow forecast can be too high. And then you've also got the evolving battery chemistry. So the electric vehicle in lithium ion battery industry is rapidly evolving, and market specialists are confident that EV adoption is set to increase. However, we've also always got online battery chemistries. Risk to support the electrification movement is could be, you know, potentially uncertain. Well, maybe I'll just say so to reiterate why I believe this is a buy is they will produce over 85 kilo tonnes per annum of premium nickel coal back magnesium battery cathode, a precursor generating us 450 million in operating cash flow per annum. Once up and running, that's a post-tax IRR of 67 percent. It's got post-tax NPV of two billion USD low capital intensity. So you know US 491 million projected capital will actually be repaid in one and a half years, which I think is fantastic and the company's goal, they've aimed high to be the top five nickel provider along with their peers BHP, Rio and Glencore. 

Candice: [00:29:49] Awesome. I mean, aim for the sky, right? And what about the most exciting part is valuation. So what? To Sean, Partners have on a price tag and more broadly like, you know, what about the rest of the market? What are what are we thinking for the share price? 

Felicity: [00:30:01] OK, so the most bullish is one dollar ninety price tag, and that's our eyes. Sean Potter has been one hundred seventy three point eight per cent upside from current levels. And then if you actually look at consensus, you're probably looking at a dollar thirty six. So again, that still double digits ninety five point two per cent upside if it reaches only consensus price target. Now again, just like APS-C, BSE X is also in a trading halt as they're conducting 55 million dollar placement at 58 cents and a five million dollar share purchase plan at fifty eight cents. So the raise is via ESP investors only. And the post market cap will be around 300 M.. So still a microcap, which is I like that. Now, the use of funds will be 30 million towards the pilot plant face to 10 million towards feasibility studies, five million towards exploration, five mil towards strategic investment and 10 mill working capital. So in summary, we both pitched future facing commodity based companies in the ESG space. They're both two to three year Time Horizon trades. So, you know, by now and stakeholders say holding HODL or whatever in in crypto. And of course, you know, you know, they're their high growth and speculative stock ideas, but we see them playing out. 

Candice: [00:31:14] What did you call that? A HODL 

Felicity: [00:31:16] hodl.

Candice: [00:31:17] It's crypto. I've never heard of that term before. 

Felicity: [00:31:19] Yeah, the crypto term, guys. 

Candice: [00:31:22] It's a crypto term. HODL. 

Felicity: [00:31:24] Our listeners should know. 

Candice: [00:31:26] So with that in mind, that's a wrap for today's episode. Please remember, although listen, I financial advisors are Shaw and Partners. Our conversation today does not constitute as personal advice, nor is it a financial product. As always, go out and seek professional financial advice before making any financial or investment decisions. 

Felicity: [00:31:44] Feel free to reach out to us on our social media channels. So our email is TMTM at Equity Mates dot com. Our Instagram handle is at Talk Money to Me podcast, where we actually update you before the open and after the close, the daily market updates as well. So, you know, check out our show notes below. 

Candice: [00:32:02] So in honour of Blackstone, I'm going to give it a go and Vietnamese TBIT catch next time, guys. 

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