Following the release of Musgrave’s Stage 1 pre-feasibility study we have updated our modelled base case mining scenario. We no longer assume toll treating, and instead model our base case as a stand-alone project with the construction of a 500ktpa processing plant. In this scenario, our modelled financing assumptions and resultant equity dilution is the largest driver of our valuation decreases to $0.33 (previously $0.40). We consider this a floor price of the project progression routes, and have a modelled a toll treatment scenario, detailed herein, that does indicate further upside potential. We maintain a Speculative Buy recommendation.
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