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Venturex offers ‘compelling project metrics’, says Blue Ocean Equities | Resources Rising Stars
Venturex offers ‘compelling project metrics’, says Blue Ocean Equities

7th September 2018
Resources Rising Stars
Sydney-based institutional broker Blue Ocean Equities has reiterated its upbeat view of emerging copper-zinc developer Venturex Resources (ASX: VXR) on the back of a project update issued this week.
Venturex reported “strong progress” with mine design and scheduling, plant optimisation and capital cost reductions at its Sulphur Springs project in the Pilbara, saying its Definitive Feasibility Study was now in its final stages and on track to be delivered by the end of this quarter.
“The delivery of the DFS, based on the revised and optimised open pit and underground mining configuration for Sulphur Springs, will mark a major step towards achieving Venturex’s objective of becoming a significant new mid-tier Australian base metals producer,” the $43 million company told the ASX.
Highly-regarded Blue Ocean resource analyst Steuart McIntyre gave the announcement the thumbs-up, in particular highlighting the $18.7 million in reported CAPEX savings.
“Venturex was our top new pick at Diggers this year, and we are attending a site visit tomorrow,” McIntyre wrote in a note to clients.
He said the company offered “compelling project metrics” – “probably the best IRR of any project we saw at Diggers this year”, with permits “essentially in place” and a “high calibre experienced management team”.
McIntyre says he has already undertaken significant due diligence on the asset, calculating an un-risked post-tax NPV of $386 million and post-tax IRR of 58%.
Even at spot prices, he estimates a still-healthy post-tax NPV of $228 million and IRR of 40%.
“A clear up and comer in the ASX copper space in our view,” he adds.
In the DFS update, Venturex told the market it had developed an open pit mine design and optimised mining schedule, increasing the production rate to 1.25Mtpa from 1.0Mtpa to maximise financial returns.   
Optimisation of the underground mine design has also been completed, building on 2017 Value Engineering Study.
The process plant configuration has been designed to produce ~60ktpa of Zn and 45ktpa Cu concentrate.