Crest Corporate Broking has set a price target for Rome Resources (RMR ) of 0.41p.
Rome is currently in the process of working up its Bisie North tin project in the Democratic Republic of Congo.
Certain areas of Bisie North already boast a resource, and at very attractive grade.
What’s more, Bisie North is located in close proximity to one of the world’s richest tin mines, at Mpama. The operator of Mpama, Alphamin currently accounts for around 7% of global tin production, and currently has a market capitalisation of around C$1.8 billion.
“The Bisie North tin project is located on the same folded granite-margin shear system as Alphamin’s Mpama North and South Mines, the world's highest-grade tin mines,” wrote Crest’s analyst Ryan Long in a note to clients.
“Alphamin is now producing around 20,000 tonnes of tin a year, generating record EBITDA,” he added.
“Alphamin proved the Bisie Ridge can host a profitable underground tin mine. Rome is testing whether the next eight kilometres of that ridge has the same potential. Following a recent inferred resource upgrade at Rome’s Kalayi dDeposit, the combined metal content from the Kalayi and Mont Agoma deposits is now around 12,900 tonnes of tin, 45,900 tonnes of copper, 86,200 tonne of zinc and 1.46 million ounces of silver, which, based on our calculations, is 33,700 tonnes of tin equivalent at an average grade of 0.95%.”
That’s considerable value already baked in, although the implication is that this is not showing through yet on Rome’s share price, which currently sits at 0.21p.
“We value Rome using a peer group-based market cap per attributable tin equivalent method, which reflects some of the Bisie North project's potential upside,” continued Long.
“This gives us a valuation of £33.2 million or 0.41p per share, an upside of 104% on the current share price.”
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The next inflexion points for Rome are likely to be drilling the Kalayi depth extensions, completing on the increased ownership percentage, further exploration and the conversion of the exploration permit into a mining permit. The company recently raised money to make preparations for the next rounds of work.