Tri-Star Resources: Making Good Progress

Tri-Star Resources has revealed a number of key developments. These include significant improvements to the design of its flagship Oman Antimony Roaster, and the receipt of the provisional environmental permit for the roaster project, thereby enabling the commencement of construction activities. Other milestones achieved include the appointment of Traxys to supply feedstock and provide offtake and related financing and other services, and the receipt of a third-party engineering report that estimates an overall capital cost for the Roaster project at $62.1m. With the overall capital cost of the Roaster project in-line with our expectations and the construction commencing as planned, we feel Tri-Star is making good progress. Assuming current antimony prices, we estimate a price per share of 0.48p, which suggests 299% upside to the current share price of 0.12p.

Oman Antimony Roaster Project

Gas handling volumes have been lowered, thereby reducing the equipment size and cost, and leading to lower fuel consumption and lower operating costs for the kilns. Further engineering work is scheduled to be undertaken as part of the “value engineering” phase that the project will now enter. An important addition to the engineering strategy has been the inclusion of a pilot plant, which will allow for small scale production whilst the main plant construction and commissioning is in progress.

Other Developments

Following the reported fifth antimony anomaly identified around the original Bald Hill antimony discovery in New Brunswick, a limited drill plan of shallow holes is being conducted to test some of these features and structures to the south of Bald Hill and results should be available during 2015. Furthermore, the management team in Turkey are now focused on progressing the necessary plans and reports for the mining permit extension for its Göynük open pit, which is expected to be processed next year.


We have amended our forecasts slightly to reflect the lower price for antimony and stronger dollar against the pound. However, we note that lower antimony prices are not all bad news for the roaster as the input prices also go down and, more importantly, the percentage paid also goes down. Margins remain robust.


For our valuation, we have assumed an antimony price of $8,500/tonne, an antimony trioxide price of $7,200/tonne and a gypsum price of $35/tonne. However, assuming all these prices increase by 20%, this would translate to a price per share of 84p, which suggests 599% upside to the current share price of 0.12p.