Pictured: New Century Managing Director Patrick Walta
The successful acquisition of Goro, New Caledonia, operations would result in New Century Resources Ltd (ASX:NCZ) becoming a major supplier of nickel and non-DRC sourced cobalt for the EV industry.
“For NCZ, the potential acquisition will serve to diversify the company’s commodity exposure. There is also potential to leverage strategic stakeholder IGO’s [Ltd] insights and expertise; however, we are uncertain as to IGO’s experience with HPAL technology. Where this potential acquisition could pose concerns for investors is around NCZ’s cash flow. The company recently finalized a ~A$50m raising, which on our estimates should see it through the ramp-up of operations at its Century zinc mine. However, any concerns around cash flows at VNC (in our view) are likely to weigh on the stock, regardless of the longer-term valuation appeal of (potentially) entering the nickel space,” RBC Capital Markets analysts noted this morning.