Cassini Resources, the five cent explorer that quickly graduated to a 25 cent stock in April after acquiring BHP Billiton’s West Musgrave nickel-copper project has taken a share price hit in its stride as it seeks to educate the market on its as yet unrealised potential.
Cassini Resources, the five cent explorer that quickly graduated to a 25 cent stock in April after acquiring BHP Billiton’s West Musgrave nickel-copper project has taken a share price hit in its stride as it seeks to educate the market on its as yet unrealised potential.
Shares in the explorer were down 10.6 per cent this afternoon, to 21 cents, despite releasing “excellent” first assay infill drilling results that exceeded expectations at its Nebo deposit near Jameson.
Managing director Richard Bevan told Business News the demand for nickel was increasing and the company believed it remained significantly undervalued.
“The reaction from the share market today was not great,” Mr Bevan said.
“I’ve spoken to a number of people this morning and I think it’s mainly the macro environment that drives some of this. We were really happy with these results, they support what we’ve been telling people.”
Earlier this month financial services company Hartleys said it updated its price target for Cassini to 46 cents per share.
“We’re significantly undervalued and there’s an opportunity for us to add some value because at the moment people don’t quite know what we’ve got,” Mr Bevan said.
“The broader market is still questioning whether we’ve got something that is a mine.”
Since acquiring the project with nickel and copper in its Nebo-Babel deposits, Cassini has been working to overcome less than positive perceptions.
“As we’ve gone through this journey with the acquisition there wasn’t a lot known about the project when BHP held it just because they tend not to report too much because nothing’s material, whereas for us it is very material,” he said.
“I think because there wasn’t a lot of transparency there were a few urban myths about the project which we’ve been able to dispel over the last three to four months.”
They included beliefs the resource was too low grade and the metallurgy was poor.
Mr Bevan said Cassini’s planned ability to open cut mine at shallow depth meant resource grades made it economical and additional metallurgy testing had proven it could get good recoveries.
“We’re in a good starting spot, there’s no red flags, but we need to do the work,” he said.
Mr Bevan said BHP had shown confidence in Cassini’s ability to bring the project into production within three to four years.
“I think (Mike Young and John Hronsky’s skills) placed us well to show them that we understood what we were doing and we had that experience...and BHP wanted to do the right thing by the community (and) find a company that would progress it with some velocity.”
Mr Bevan said despite today’s disappointing share market reaction Cassini was focused on the future.
“We need to maintain that focus on the medium term because you can get a bit distracted by the ups and downs but these results definitely support what we want to do. We know if we keep delivering results like this we’ll get to where we need to get to.”
“We’re probably priced as an explorer...it’s not an exploration project, it’s a resource development project and we’re probably not getting that credit yet.
He said Cassini tried not to draw parallels with nickel market darling Sirius Resources.
“I think to draw broad comparisons is probably problematic and I think the market’s probably a little bit over that, but I think we’ve benefitted from being in their afterglow a bit,” he said.
“It’s shown that a company can have a discovery success and turn that into a mine and I think those sorts of case studies are very positive.”
Elsewhere, nickel miners had mixed results on the share market today.
Western Areas was up .23 per cent at $4.32.
Poseidon Nickel was down 7.1 per cent to 19.5 cents.
Mincor Resources was down .87 per cent to 57 cents.
Sirius Resources was down 1.59 per cent to $3.10.
Panoramic Resources was up 3.15 per cent to 65.5 cents.
