Euroz Securities has initiated coverage on Legend with a speculative buy recommendation and an 8 cents per share price target.
Following is an extract from Euroz’ research report on Legend:
- We like the Nickel thematic: Growing battery demand at the margin adding fundamental supply-demand imbalances driven by traditional consumption but a lack of upstream discovery and development;
- This is further nuanced by economic bias towards Nickel Sulphide as the ore source for battery grade Nickel Sulphate;
- LEG represents a concentrated Nickel Sulphide exploration strategy, focused exclusively on the emerging Fraser Range belt;
- LEG is the second largest tenement holder with nearly 3,100km2 of ground;
- Mark Creasy and Independence Group NL (ASX:IGO) account for over 40% of LEGs register and are key JV partners in several of LEGs permits;
- Consequently, LEG benefits significantly from the respective in-house technical capabilities of IGO and Creasy Group;
- We unashamedly point to the SIR.ASX success story as evidence of exploration leverage for junior explorers;
- Regional discovery by either LEG or other active operators in the Fraser Range have the capacity to excite the market;
- There should be plenty of news flow with diamond drilling commencing immediately at Area D;
- Outside of a discovery at Area D, CY’20 should see additional diamond and RC drilling activity at each of Magnus, Octagonal, Crean, Shackleton and Worsely, each of which have identified mineralisation with first pass drilling;
- With $13m in cash and receivables plus a further $10m of options in the money, LEG is well funded for its current planned activities;
- We initiate with a Speculative Buy recommendation & $0.08/sh Price Target;
- Scale of landholding in an emerging Ni Sulphide province is a key differentiator LEG in the peer group.