Berenberg initiates coverage on Jubilee Metals

Berenberg said Jubilee, which recovers chrome, platinum group metals and copper from mine tailings, was "one of the few ways" to gain mining exposure with a clear alignment to the circular economy and UN sustainable development goals.

The German bank said the company was more of a technology/processing business rather than a miner, and noted it operates in "a fledgling market with huge opportunity", not only due to depleting mine reserves and grades but also due to "a large amount of spent tailings" available for processing from historical mining operations.

"We estimate that the copper tailings market alone is worth $710.0bn globally; this is a clear opportunity across the base metals space, particularly given the push for 'future-facing commodities' and the scope for supply/demand imbalances in key commodities such as copper, as well as the ability to turn balance sheet liabilities into assets and safely rehabilitating old facilities that could have been an environmental risk," said the analysts.

Berenberg added that the opportunity for Jubilee did not stop there and estimates that the global platinum group metals space to have 42.0m ounces of recoverable PGMs, at a market value of $106.0bn.

"We value Jubilee on a blend of 1x NAV and 6.5x EBITDA, a discount to its trailing four-year average. The stock is trading on 0.92x NAV."