Magnis Resources Releases Bell Potter Research Report Highlighting Nachu Project

Magnis Resources (ASX:MNS) has released their Bell Potter Research report, which highlights the de-risking and upgrading of the Nachu Project, located in the South East of Tanzania.
Highlights from the report include:

Key permits received, financing options available
In the last month MNS has received the two key permits required to allow the commencement of development of the company’s 100% owned Nachu Graphite Project in Tanzania. At the end of August MNS was granted its Environmental Certificate and just over two weeks later the Special Mining Licence (SML) was granted by the Ministry of Energy and Minerals (MEM). The SML represents the final key permit for project development. The SML also provides for greater security of tenure over a standard Mining Licence (ML). This also satisfies the final major Condition Precedent for the US$150m project financing and construction package with offtake partner SINOMA.
Metallurgical test work adds value
Metallurgical test work completed during August has highlighted the potential for greater value to be realised from Nachu’s product suite. MNS has achieved concentrate grades ranging from 99.0% to 99.2% from a modified flotation process that does not require chemical treatment of the product. This has potential to provide end-users with a high purity concentrate that requires less processing and chemical purification, delivering cost, safety and environmental benefits.
Investment thesis – Speculative Buy, valuation $0.58/sh
MNS provides leverage to an emerging commodity with a solid demand outlook driven by expected growth in lithium-ion batteries. The Nachu project utilises conventional mining and processing technologies and we believe it to be economic at current graphite prices. Recent progress is building a good track-record for management and de-risking the development of the project. This is reflected in our reduced risk weightings and an increase to our NPV-based valuation from $0.37/sh to $0.58/sh. Earnings increases of 20% and 30% in FY17 and FY18 are driven by our latest foreign exchange assumptions. We retain our Buy (Speculative) recommendation.

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