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Corcel - Initiation of Coverage

Corcel is the old Regency Mines, a company probably best known for its vast PNG nickel laterite project Mambare which, on its own, was once valued at £40 million. It has been a bit quiet over recent years as the company has gone through a substantial restructuring since the previous Chairman was rather unceremoniously voted out by shareholders. The decks have now been cleared ready for a period of substantial growth. With James Parsons now at the helm and the 12 month “legacy clean up” phase behind them, investors can look forwards to the creation of a highly relevant vehicle.

• Positioned to really benefit from expected price hike in battery metals

  The transition to a low carbon world has begun in earnest. Storage is needed for renewable energy to be a viable and stable source of energy, and hence the growing clamour for batteries and battery metals where a supply crunch is expected in the mid-2020s onwards with big structural price hikes.

• Mambare poised to be a DSO nickel supplier to the large Chinese market

  A Mining Lease could be awarded in 4-6 months allowing a DSO operation, funded by a JV partner. Together with Wowo Gap, another big PNG nickel project that is coming to Corcel, this could create some M&A action.

• Big opportunities as the UK switches to flexible power generation

  Corcel is investing in energy storage/renewable projects to provide critical services to the UK grid as it transitions from coal/nuclear generated power to renewables. The initial 100MW energy storage at Burwell, Cambridge is strongly backed by a major pipeline of projects that are under review.

• Peer comparisons & industry metrics suggest an initial 141% upside

  Our highly conservative valuation begins to show the potential. We initiate coverage of Corcel with a target price of 3.19p and Conviction Buy stance.