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

Published Mar 17, 2021

What happened?


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.

Managing Director's summary

Scott Williamson Managing Director of Blackstone Minerals Ltd has provided a statement.
Scott Williamson
Scott Williamson
Managing Director, Blackstone Minerals Ltd

Analysts thoughts

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.

file

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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