Over the past six years, Baobab Resources (BAO) has been developing a large mining and processing complex in Mozambique - the Tete Pig Iron & Ferro-Vanadium Project. With prospects for success looking increasingly encouraging, the share price looks well out of step with events.
IC TIP:
Buy
at
10p
Tip style
Speculative
Risk rating
High
Timescale
Long Term
Bull points
- Huge potential resource
- Definitive Feasibility Study imminent
- Metallurgical upgrades
- Low cost production
Bear points
- Binary nature of investment
- Security issues in Mozambique
Baobab has identified a gross resource measuring 759m tonnes (323m tonnes measured & indicated). By the end of this year, it expects to deliver the Definitive Feasibility Study (DFS) for the project, which, it is hoped, will attract the interests of an industrial partner - possibly an Asian steelmaker - to fund future development.