Blackstone Minerals Ltd - Blackstone (ASX:BSX) Outlines Updated Corporate Strategy in its Latest Investor Presentation
Blackstone Minerals Ltd (ASX:BSX)

Blackstone (ASX:BSX) Outlines Updated Corporate Strategy in its Latest Investor Presentation

Question   What Does It Mean?
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Highlights

What has happened?

Blackstone Minerals (ASX:BSX) announced a corporate strategy update in light of the recent Ta Khoa exploration success and driven by the strong indicative demand received for the Company’s planned downstream products. In the update, the Company also announced that the ongoing Pre-Feasibility Study is now considering significantly expanding their downstream refining capacity. The Company also confirmed that separate Pre-Feasibility Studies (PFS) would be delivered for its upstream and downstream business assets.

What are the key highlights?

In regards to the downstream PFS updates, the highlights were:

  • Blackstone highlighted that key aspects the downstream PFS will consider are, expanding the planned refining capacity, which should enable the treatment of both third party concentrate and Blackstone’s potential orebodies within the Ta Khoa district in Northern Vietnam.
  • The Company also indicated that the PFS was considering enhancing the scale and shared infrastructure, which the Company anticipates will lead to a reduction in project capital intensity and a decrease in unit operating costs driven by economies of scale and improved refinery performances due to the ability to blend concentrates.
  • Lastly, the PFS will consider the flowsheet for the recovery of additional by-products. Preliminary test work and desktop studies have identified an economic flowsheet for the recovery of by-products from the Ta Khoa DSS concentrate. Further studies will investigate the performance of Ta Khoa Massive Sulfide Vein (MSV) ores and provide PFS level capital and operating cost estimates.
  • Blackstone anticipates the downstream PFS to be completed by June / July 2021.

In regards to the upstream PFS updates, the highlights were:

  • The Company noted that the upstream PFS would focus on incorporating high-grade MSV deposits into the mine plan to reflect ongoing exploration success at multiple prospects, including Ban Chang, King Snake and Ta Cuong. The Company is aggressively drilling with a view to incorporate these deposits into the upstream PFS mining inventory.
  • Another major item on Blackstone’s upstream PFS is to investigate the potential restart and possible expansion of the existing 450ktpa concentrator, which will be supported by the inclusion of higher grade feed into the mine plan. This has the potential to improve project NPV through deferral of significant upfront capital, mine life extension, and lower technical risks.
  • Lastly, the PFS will seek to cover the drilling out and appropriate mine sequencing of large, disseminated sulphide (DSS) orebodies, including Ban Phuc and Ban Khoa.
  • Blackstone anticipates the upstream PFS to be delivered in Q3/Q4 2021, allowing for the sufficient completion of drilling to incorporate DSS and MSV prospects.

What does this announcement mean?

SmallCapInsider from Mawson Graham provides perspective on this recent announcement.
SmallCapInsider
Written by SmallCapInsider
Published Mar 17, 2021

What does this mean?

Blackstone's corporate strategy update may prove significant as it highlights the unique opportunities currently on offer for the Company. A potentially important matter raised in the report pertains to the PFS progressing designs for an expansion of the refinery, enabling the production of a range of Nickel:Cobalt:Manganese (NCM) precursor products, for example, NCM811, which attract a substantial premium compared to metal prices (See figure 1).

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If the plans go-ahead for the restart and potential expansion of the existing 450ktpa concentrator, which will be supported by the inclusion of higher-grade feed into the mine plan, it could have the potential to improve project NPV through deferral of significant upfront capital outlays, life of mine extension and lower associated technical risks.

Blackstone also notes that they will complete the studies across two distinct divisions: the Upstream Business Unit (UBU) and the Downstream Business Unit (DBU). The UBU division will comprise 90% economic interest in the Ta Khoa Nickel-Copper-PGE mine in northern Vietnam and associated infrastructure, including the 450ktpa nickel concentrator. Key deliverables for the UBU include delineating potential maiden Resources on multiple deposits, completing Feasibility Studies and restarting the existing concentrator. A timeline of the UBU key deliverables can be seen below.

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In regards to the DBU, it is intended to initially comprise a refinery in North Vietnam, with future potential to enact a global strategy that delivers chemical products for the emerging battery market. The Company intends to form multiple Joint ventures / Alliances capable of producing a variety of products to suit the dynamic battery materials supply chain. Blackstone envisages that each Joint Venture / Alliance partner will contribute to the preproduction capital cost and subsequently own proportionate equity with the specific Joint Venture / Alliance. Blackstone expects that it's portion of the funding will be achieved through a combination of debt, equity and off-take financing.

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Blackstone also provided some updates on the key deliverable's timeline for the DBU division (See Below). The Company envisages the first production of NCM precursor products for the Lithium-ion battery industry in 2024. The updated strategy will see Blackstone working towards delivering multiple milestones, including the proof of concept through a pilot plant, securing offtake agreements, securing suppliers and ramping up downstream refinery lines.

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The information within this section has been provided by Mawson Graham Pty Ltd and is for general information purposes only and is not intended to reflect any recommendations or financial advice. The information in this section has been prepared without taking into account your objectives, financial situation or needs. For this reason, you should consider the appropriateness of the advice or recommendation in light of your own personal circumstances, relevant risk factors, the nature and extent of your risk of loss, as well as the legal and accounting consequences before acting making an investment or trading decision regarding any Financial Product mentioned herein. While it is believed that all information sourced and contained within this section to be accurate at the time of publication, liability for any errors, omissions, accuracy or completeness of the information (except any statutory liability which cannot be excluded) is specifically excluded by Mawson Graham Pty Ltd, its associates, officers, directors, employees and agents. Past performance is not a reliable indicator of future performance. Important Disclosure: Mawson Graham Pty Ltd, its directors, associates and employees advise that they may hold securities, may have an interest in and/or earn brokerage, investor relations fees, corporate fees, and other benefits or advantages, either directly or indirectly from client transactions arising from any information mentioned within this section and in documents published within this section.
Mawson Graham
Mawson Graham

Managing Director's Summary

Scott Williamson

The decision to separate PFS's for the upstream and downstream business unit will enable the Company to better deploy resources, unlock strategic partnerships, deliver funding solutions and increase the overall transparency in communicating business progress.

Scott Williamson
Managing Director, Blackstone Minerals Ltd
Scott Williamson

The updated timing on the downstream PFS reflects the Company's ambition to capture as much value in a rapidly growing lithium-ion battery industry. We believe we are at the forefront of a once in a generation opportunity and the Company is positioning by increasing the scale of its downstream refining capacity. The Company is confident it will attract joint venture partnerships with leading organisations that have strong alignment to Blackstone's strategy and best practices engrained in their business models.

Scott Williamson
Managing Director, Blackstone Minerals Ltd
Scott Williamson

For the upstream business, we are focussed on unlocking potential of the Ta Khoa district. With continued exploration success across our targets at Ta Khoa, the Company is confident that it can achieve a critical mass of MSV mining inventory to warrant the restart of the existing concentrator. To present the highest value proposition to shareholders and potential financiers, and to deliver an enhanced downstream strategy, it is important that each of Ban Chang, King Snake and Ta Cuong are incorporated into the upcoming upstream PFS study.

Scott Williamson
Managing Director, Blackstone Minerals Ltd
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