CHN and Mitsubishi Corporation have entered a Memorandum of Understanding (MoU) that is designed to advance towards a Strategic Partnership to develop the Gonneville PGE-Ni-Cu-Co project. Under the terms of the MoU, a binding partnership could be formed within 90 days of the release of the Pre-Feasibility Study (PFS). We expect a strategic investment by Mitsubishi Corporation would most likely come at the project level and equate to a minimum 10% interest in the Gonneville project. CHN has reiterated its target of releasing the PFS in the middle of 2025. CHN had A$107m in cash at the end of March, leaving the company well-funded to complete the PFS over the next twelve months. The delay in securing a formal agreement on a Strategic Partnership to after the release of the PFS is disappointing, however we believe Mitsubishi Corporation’s willingness to be named at this point bodes well for CHN to move to a binding partnership in 2025. We reiterate our SPEC BUY rating and A$2.20 price target.
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