Botswana Diamonds share price (LON:BOD) has been given a 6.1p price target by analysts at First Equity.
The 6.1p price target represents significant upside from the current Botswana Diamonds share price of 1.07p.
Botswana Diamonds have recently announced two thick kimberlite zones identified of 19.1 and 13.5 metres at Thorny River and have exercised pre-emption rights over Vutomi Mining meaning BOD now have a 76% interest in the project.
First Equity point to the developments at the Thorny River project as an integral element of their price target but it is in no way the only asset providing potential shareholder value.
In addition to the Thorny River asset, Botswana Diamonds are developing the Ghagoo project which First Equity forecast to be worth $36.1m to BOD.
Analyst Jason Robertson said in a note: “We have taken a very prudent approach by calculating an estimated in-the-ground value using the SAMREC Indicated (at 8% value) and Inferred(1.5%) resource figures on a risked basis to factor in development and re-start risks at Ghaghoo (est. value $36.1m) and the KX36 discovery (est. $29.5m). At Thorny River, we await details of the model being developed to estimate the potential resource before ascribing a valuation, which we believe has potential to emulate the lucrative economic upside of the Marsfontein mine. Other Group projects such as the Sekaka database and Sunland licences are valued at a notional sum at this point.”
“The market has yet to price in the importance and potential upside of Botswana Diamonds’recent project additions, including the high-grade KX36 kimberlite pipe and Sekaka database last year and more recently, in August ’21, a stake and option over Ghaghoo, which constitutes over 50% of our estimated Group enterprise value. Once the model details and potential resource at Thorny River are known, we should understand more about the value of this highly interesting diamond bearing system and its development upside.”
