I-Minerals Completes Feasibility Study
This morning, I-Minerals (TSXV: IMA & US: IMAHF) announced the completion of its feasibility study for its Bovill Kaolin project. We consider this to be a very aggressive growth stock suggestion that will ultimately become an income stock for investors.
The company was vetted last year by Euro Pacific Capital, and received a $0.70 price target. Today, it trades for less than a quarter! It has a recent, more updated review by Scarsdale Equities, who just initiated coverage with a $1 price target!
Here is an excerpt from this morning’s press release…
“I-Minerals Inc. is pleased to announce that it has received the results of the Technical Economic Model (“TEM”) of the Feasibility Study (“FS”) on the Bovill Kaolin Project, a long-term resource of high-purity quartz, potassium feldspar (K-spar), halloysite, and kaolinite. The Bovill Kaolin Project is strategically located within five miles of state highways, with commercial distributions of electricity and natural gas already near the property boundary.”
We should note that this is a very high-value area of halloysite consumption, that uses the halloysite nanotube as a carrier of different medicines or applications. As the tube erodes, the medicine in the hollow core is released. For the purposes of the feasibility study, IMA did not get credit for the halloysite sales into life science markets, as they are still in the development stage. IMA already knows what kind of prices cosmetics and pharmaceuticals fetch, so their revenues will be materially higher at the point they start making these high-value sales.
IMA will be a world dominator when it comes to the minerals they mine. The company’s marketing strategy is to offer a superior product at the same price as an incumbent producer.
Highlights of the Technical Economic Model include:
- $385.8 million pre-tax NPV; $249.8 million after-tax NPV
- 31.6% pre-tax IRR; 25.8% after-tax IRR
- Initial capital cost of $108.3 million
- Total life-of-mine capital costs of $120.0 million
- 21.3 million short tons of resources
- 8.7 million short tons of reserves
- 26-year mine life, with 0.54:1 strip ratio
- 3.2 year estimated pre-tax payback; 3.7 year estimated after-tax payback
Our Recommendation: Consider Shares of IMA Immediately
IMA is managed by the very best people in the business, looking to operate a real cash-flowing enterprise. Mr. Conway has stated he expects to pay a dividend, which should turn this tiny stock into a cash cow, with major upside potential over the next 12 to 24 months as they enter into becoming a producing company.
I believe Mr. Conway and his team will be enormously successful.