VSA Morning Miner, 10/11/21
Ferro Alloy Resources (Ferro-Alloy Resources Ltd (LSE:FAR))
Ferro Alloy Resources (Ferro-Alloy Resources Ltd (LSE:FAR)) has announced the first sale of ferro-molybdenum and that the testing of the production of ferro-vanadium has been successfully completed enabling the company to choose which products it produces to maximise margins. The move to higher value add products is a strong positive for operating margins at the existing processing operation and is an important milestone that the company has been able to execute in line with its previous announcements.
The sales of higher value products are already reflected in our forecasts, however, we highlight that the company specifically in reference to the processing operation is taking a flexible approach and optimising economics of the various purchased products rather than focusing on output targets.
FAR is now able to sell ammonium metavanadate (AMV) as it always has, vanadium pentoxide, ferro-vanadium, ferro-molybdenum and nickel concentrates meaning that the company is able to fully monetise the vanadium bearing materials which it procures. As well as greater revenue streams the product flexibility gives the company the opportunity to diversify its customer base.
We reiterate our Buy recommendation and 1.80p/sh target price.
Oliver O’Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: [email protected]
Paul Renken, Senior Geologist | T: +44 (0)20 3005 5011 | E: [email protected]
VSA Capital Research | T: +44 (0)20 3005 5000 | E: [email protected]
VSA Capital Limited, New Liverpool House, 15-17 Eldon Street, London EC2M 7LD | www.vsacapital.com
This email is intended solely for the named recipient. It may contain privileged and/or confidential information. If you are not one of the intended recipients, please notify the sender immediately, and destroy this email: any disclosure, copying to any person or any action taken or omitted to be taken in reliance on this e-mail, is prohibited and may be unlawful. Any views expressed in this message are those of the individual sender, except where specifically stated to be the view of VSA Capital Limited, its subsidiaries or associates. Whilst all efforts are made to safeguard inbound and outbound emails, VSA Capital Limited and its subsidiaries or associates cannot guarantee that attachments are virus-free or compatible with your systems and do not accept any liability in respect of viruses or computer problems experienced.
VSA Capital Limited will use your personal information to administer your account in order to provide any products and services you have requested from us. Your personal information will be kept secure and will not be shared with any other party unless you provide consent to that effect.
VSA Capital Limited is Authorised and Regulated by the Financial Conduct Authority and is a member of the London Stock Exchange.
The Company is registered in England with company number 2405923 at New Liverpool House, 15-17 Eldon Street, London EC2M 7LD.
