PTX Metals: Analysts see potential for a doubling of the share price

The analysts at Great White Capital have analysed PTX Metals Inc. (CSE: PTX, FSE: 9PX, WKN: A0MVNG) for the first time and given the share a buy rating. A price target of 0.05 Canadian dollars (CAD) was determined, which corresponds to a price potential of 100 per cent based on the current price of 0.025 CAD.

Based on the current exploration results, the analysts see the potential for a significant metal deposit at both the W2 copper-nickel platinum group elements and the Shining Tree gold project in Ontario. PTX Metals intends to gradually realise this in the future through its continued exploration efforts.

According to the analysts, the W2 project of PTX Metals in Ontario is favoured by the fact that it comprises the stratified mafic-ultramafic Lansdowne-House Igneous Complex. It is highly prospective for large copper, nickel and reef-type deposits with platinum group elements. The widespread mineralisation has already been identified and delineated in at least seven significant mineralised zones. They lie within a 7.5 kilometre long folded corridor and also offer the potential to find gold here.

Gold mineralisation throughout the Shining Tree area occurs mainly in quartz and quartz-carbonate veins disseminated in shear and fault zones. PTX Metals believes that the primary gold deposit is an orogenic deposit, the type of deposit that accounts for more than one-third of the world’s gold production.

The W2 project is of the greatest importance for the valuation of PTX Metals

In their valuation, the analysts at Great White Capital assume that a large part of the company’s valuation is attributable to the W2 project. Using an in-situ valuation method, they therefore arrive at a base NAV of CAD 23 million. If the valuation is based on a strong bull market, the valuation could rise to CAD 39 million or CAD 0.09 per share, while in a negative bear market scenario a market capitalisation of only CAD 13 million or CAD 0.03 per share is to be expected.

This means that the share currently does not even reach the low market capitalisation on which a bear market is based. This alone clearly emphasises the potential currently inherent in PTX Metals and the entire junior sector.

The experts at Great White Capital have already made very cautious calculations and have assumed an EV/copper equivalent of USD 0.013 per pound for PTX Metals, while other explorers and mine developers are trading at USD 0.017 per pound. The analysts see the chance that this discount in the valuation will be corrected as soon as PTX Metals delineates its own resource for the property.

Focused on generating exploration targets

It is acknowledged that the focus is clearly on increasing mineralisation and delineating an initial resource. To this end, over 1,544 additional metres of drilling have been completed since the completion of the first phase of the drilling programme at W2 alone. The results to date are impressive, as shown for example by drill hole LH-01-06 with 0.57% copper equivalent over 220 metres.

In addition to the experienced management around CEO Greg Ferron, the overall positive outlook for commodities and precious metals is emphasised. As it can be assumed that the global tensions will continue and investors will increasingly head for safe havens, the prices of gold and the important base metals can be expected to remain at a high level in the medium term.

For base metals, China’s demand for refined copper is expected to rise due to the expansion of the power grid, solar installations and increasing sales of electric vehicles. On the supply side, analysts expect the market for copper concentrates to remain in significant deficit due to the estimated delay in restarting the Cobre mine in Panama.

Looking ahead for PTX Metals, Global White Capital expects that an initial mineral resource estimate for the W2 project in the order of 20 million tonnes with grades in the range of 0.5% to 0.75% copper equivalent could be presented.