• Rumble Resources’s share price could double on zinc demand
  • Opthea could rise more than 4x after Phase 3 completions
  • Development Global has a portfolio of future facing metals


Wilsons says Rumble could double on zinc demand

Wilsons Asset Management has initiated coverage on Rumble Resources (ASX:RTR), with an Overweight rating and a 40c target price (vs current price of 18c).

Rumble is focussed on the early stage Earaheedy Zinc-Lead project, located 110km northeast of Wiluna in WA.

Rumble declared a maiden resource for Earaheedy in April this year of 94Mt @ 3.1% Zn+Pb and 4.1g/t Ag (at a 2% Zn+Pb cutoff). This resource places Earaheedy as one of the largest zinc sulphide discoveries globally in the past decade.

Further, the large maiden resource came only two years after the initial discovery hole (suggesting relatively easily definable and extensive mineralisation).

“This is only the starting point for how large Earaheedy could become,” notes Wilsons.

“We believe Rumble is only in the early stages of the discovery phase, and expect ongoing positive exploration newsflow ahead of the commencement of a scoping study late this calendar year.”

“We see significant potential for Earaheedy to become a super-sized zinc-lead resource (i.e. >300mt),” added Wilsons.

Despite its vast scale potential, one possible limitation for Earaheedy’s upside is the relatively low grade of the resource.

But according to Wilsons, of crucial importance to the ultimate project economics will be the testing of Dense Media Separation (DMS) for use at the front end of any flotation processing.

DMS could have the potential to quickly (and cheaply) reject waste rock, and thus significantly upgrade the metal content of material entering the processing plant.

Meanwhile, Wilsons believes zinc has been somewhat ‘forgotten’ in the battery material/electrification thematic which has taken off in recent years.

“We would argue that zinc is critical to the successful decarbonisation of the economy, and is particularly leveraged to any potential Chinese stimulus expected over the coming 12 months.”

“Our 40c target price is based on an average of a range of Insitu Metric (i.e. EV/Resource) scenarios.

“We remind investors that RTR remains an early stage mineral development company/explorer, thus carries inherent early stage risks.”


Goldman sets huge price target on Opthea

Goldman Sachs has a Buy recommendation on Opthea (ASX:OPT), with a huge 12-month target price of $2.80 (vs current price of $0.60).

Opthea is an eye disease specialist conducting not one but two concurrent Phase 3 clinical trials with OPT-302 (drug name “sozinibercept”) for the treatment of wet AMD – a chronic eye disorder that causes blurred vision or a blind spot in your visual field.

Goldman says there are several drug candidates being evaluated in the US$13bn+ retinal disease markets, but believes OPT-302 is particularly interesting since it has demonstrated improved efficacy above the existing standard of care in a large Phase 2b study.

In the latest results, OPT-302 was shown to have a novel mechanism of action and a favourable safety profile.

“A similar result in the ongoing Phase 3 trials (ShORe and COAST) would be considered clinically meaningful, and would likely present attractive commercial opportunities,” noted Goldman.

Goldman says that setbacks encountered by drugmakers Kodiak and Adverum demonstrated that there is likely to be strong clinical interest in a new approach and a new drug.

Opthea is fully funded to take the ongoing clinical trials to a top-line Phase 3 read-out, which is expected in mid-2024.

Key risks for buying this stock, according to Goldman, include replicability of positive data in larger Phase 3 studies, lack of regulatory approval, and potential changes in competitive dynamic such as pricing and reimbursement.


Future facing metals a tailwind for DVP

Broker Euroz Hartleys has a Buy recommendation on specialist underground explorer, Develop Global (ASX:DVP), with target price of $3.90 (vs current price of $3.08).

Run by industry titan Bill Beament, DVP has a two-pronged strategy: to mine its own resources, and to help others mine theirs.

Euroz Hartleys believes the ‘secret sauce’ for this specialist underground miner is its capability and capacity of the mining team to keep development ahead of production.

“In this way, Mr Beament has made it clear what his focus is; and it is in the name, DEVELOP,” said the broker.

The company currently has circa $61 million in cash, including money from the recent capital raise.

According to Euroz, the recent withdrawal from the Liontown Resources (ASX:LTR) contract is warranted.

“The scale of the Liontown operation is unprecedented from a ‘start to full production’ perspective. Progressing with a contract of this scale, with its own projects ramping up would be counter-intuitive at this particular stage in DVP’s development,” noted the broker.

Meanwhile, progress at the Bellevue Gold (ASX:BGL) contract continues with 3km of underground development completed for the quarter, which generated $23m in contract revenue.

“We look forward to the commencement of production in August, which will see this top line number improve as production ore is moved out of the hole and ore-haulage rates are activated,” said Euroz.

With a growing portfolio of future facing metals, fully leveraged to commodity prices, Euroz sees strong upside to DVP.

“We like the company strategy which puts people first, coupled with other initiatives which closely align with the workforce of the future – a strategy that places it well to attract and retain the next generation of talent.”


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