Bravo Mining - Unlocking Value as Tier-1 Project Luanga Progresses
A mine blessed with a location in an otherwise highly concentrated PGM sector
Bravo Mining
Bravo Mining is the latest addition to my portfolio, and in this article I will explain why I ended up buying the company, and a little bit more. Bravo is not intended to be a short-term trade, but the idea is to sit on my hands for at least 18-24 months and wait for the company’s Luanga project to move closer to production.
Index of article:
Luanga
1.1 Luanga to production - possible timeframe
1.2 Platinum Group Metals
1.3 Nickel
Corporate
2.1 Luis Azevedo
2.2 Operational management
2.3 Board
2.4 Management ownership and compensation
2.5 Promises made - Promises kept?
Riskit
Summary and Expectations
4.1 Margin of safety gives you breathing room
4.2 Future expectations and possible timelines
Luanga
Bravo’s success is defined by its 100% owned Luanga project. Luanga is a PGM+Au+Ni project located in Carajas, Para state, Brazil, and is one of the few Tier-1 PGM projects not located in either Russia or South Africa. At the time of writing, Luanga is a 04/2026 PEA (Premilinary Economic Assessment) stage project, so a very early stage mining project. The numbers so far look great, but jumping in at this early stage also involves a lot of risk. If the underlying questions can be answered positively, the risks and uncertainty associated with the project will be reduced and the stock will be priced to reflect the fair value of the project in the future.
Platinum group metals are Luanga’s dominant revenue driver, but about a fifth of the project’s value comes from the gold and nickel mined as by-products. A more detailed breakdown at the time of writing is as follows;
Palladium 41%
Platinum 29%
Rhodium 11%
Nickel 16%
Gold 3%
Luanga, the long-held deposit of mining giant Vale is significant in size and benefits economically from an excellent existing mining infrastructure. Cost-effective hydroelectric power, power lines, high-quality roads, railways, water and a skilled workforce are all already present in the Carajas mining area, which is one of the most active mining areas in the world. The same area also hosts the world’s largest iron ore mine.
The closest rail links are Vale’s privately owned railway tracks at Parauapebas. Bravo has access to this section of railway as part of the Luanga purchase agreement with Vale. The Luanga mining license is located on private farmland, mainly used for cattle ranching, and there are no indigenous peoples or protected forest areas within the license area.
The PEA published for the project in the summer of 2025 delivered strong numbers, with an NPV8 of $1.25B USD. Bravo can also process the metals internally (vertical integration), increasing the same NPV8 by approximately 50% to $1.86B USD. The project has a whopping IRR of 49.7% and a payback period of approximately 2.4 years.
The metal prices used in the study were as follows;
Pd - US$1,271/oz, Pt - US$1,500/oz, Rh - US$6,000/oz, Au - US$3,251/oz, Ni - US$8.00/lb.
At the time of writing, the prices are;
Pd - US$1,584/oz, PT - US$2,052/oz, Rh - US$10,100/oz, Au - US$4,770/oz, Ni - US$7.80/lb.
At the time of writing, the “base case” NPV8 of Bravo’s Luanga project is US$2.25B, and with vertical integration the same would be US$3.30B.
The main purpose of the pre-feasibility to be published during the summer is to confirm the existing data. It would be important to get more confirmed reserves, especially in the “measured & indicated” category. Possible additional potential is offered by the extensive “inferred” category reserves. Bravo is actively drilling the project with the aim of creating an optimal mining plan, increasing the takeover and of course increasing financial certainty.
The main purpose of the pre-feasibility to be published during the summer is to confirm the existing data. It would be important to get more confirmed reserves, especially in the “measured & indicated” category. Possible additional upside is offered by the extensive “inferred” category reserves. Bravo is actively drilling the project with the aim of creating an optimal mining plan, increasing the project in size and of course reducing financial and technical uncertainty.
Let’s break down the terms a bit;
Measured = Very high density of drilling and sampling. Geological and grade continuity has been reliably confirmed.
Indicated = Sufficient drilling to reasonably estimate the quantity and grade of ore. Continuity is reasonably certain.
Inferred = Limited drilling and sampling. The estimate is based on geological interpretation, but confidence in the numbers is still low.
Bravo’s Luanga project M&I reserves totaled 10.4 million ounces of PdEq* (palladium equivalent) based on 2025 MRE. In addition, the ore grade was improved through the new study.
*PdEq refers to a unit of measurement commonly used in mining to express the total value of multiple metals (such as gold, nickel or copper) found in a deposit in terms of the amount of palladium of the same value. This allows for a simplified, single-number comparison of resource value.
Bravo completed a preliminary economic assessment with a fully acceptable Measured + Indicated category. The table below shows the breakdown of the Luanga project across the different categories. It is also worth noting that Bravo has only drilled to a depth of approximately 250 meters on scale, but samples of continuity have been obtained from deeper drill holes. However, exploration and drilling are still ongoing and investors should receive more information on these during 2026.
In February, Bravo also established a promising gold-copper division, which aims to maximize the potential of these metals. The main focus of the activity is on the Luanga project, but Bravo does not rule out possible acquisitions in the vicinity of the Carajas mining area. The division is led by Fabio Masotti, who has more than 30 years of mining experience. Masotti’s previous employer was mining giant Vale, where he held leadership roles in exploration, project creation, business development, strategic planning and research management. During his career, Masotti has worked on a wide range of metals and raw materials, including IOCG (Iron Oxide Copper Gold) systems and nickel sulphide deposits.
On the legal side, the importance of Luanga has also been noted, with the Brazilian government designating Luanga as a strategic mineral project and platinum group metals are on the BNDES’ list of critical minerals.
The environmental agency of the state of Pará, SEMAS, granted Bravo a preliminary permit (LP) for its Luanga project on March 3, 2025. The permitting process for a mine in Brazil consists of three main stages:
A preliminary permit (LP) (this has now been granted), followed by a construction permit (“LI”) and finally an operating permit (LO). The LP is the most critical, time-consuming and challenging to obtain, as it defines the basic parameters of the project and requires both environmental feasibility and social approval. These were granted in a successful public hearing in December 2024. Bravo’s LP covers the mining and processing of platinum group metals, as well as nickel, copper and gold.
Luanga to production - Possible timeframe
Bravo will continue to actively drill Luanga, and the aim is to publish a PFS (pre-feasibility study) in summer 2026. If the PFS confirms the excellent financial numbers seen in the PEA, and no new red flags emerge from a technical perspective, for example, Bravo can move on to preparing the next FS (feasibility study), which would be the last major study before a decision to build the project.
Summer 2026 → Pre-Feasibility Study completed
Summer 2027 → (Bankable) Feasibility Study completed
2027-2028 → FID, when the required off-takes and financing for the project have been achieved
2028 → Construction phase, approximately 24 months
2030 → First production
Platinum Group Metals
The four main metals of the Luanga project (Pt, Pd, Ni, Rh) account for about 97% of the project’s revenue. The remaining 3% at current prices comes from gold.
Palladium, currently the largest revenue driver for the project with a share of about 40%, is key to controlling emissions from gasoline-powered vehicles. Almost 70% of palladium is used in the automotive industry, and more specifically in catalytic converters. Demand for palladium has remained high despite the growth of the electric vehicle market—partly due to the fact that hybrid vehicles use more palladium and other PGMs than conventional internal combustion engine vehicles. After a few years of all-electric car craze, many major automakers have returned to hybrid vehicles, and hybrids were once again the fastest-growing vehicle category in the United States. The return of hybrid cars is therefore a great driver for Bravo.
Platinum and Rhodium, which together make up another 40% of Luanga’s value, are also strongly linked to the automotive industry and catalytic converters. The new arrival of hybrid cars is therefore a significant part of the thesis, as on average about 20-40% more rhodium is used in a hybrid car than in a traditional internal combustion engine car and about 10-20% more platinum and the already mentioned palladium are used in hybrids.
About 40% of the total demand for platinum comes from the automotive industry. In addition, platinum is used in jewelry (about 25% of demand), and as a general industrial metal, which also accounts for about 25-30% of demand. The demand palette for platinum is therefore much more widely dispersed than that of palladium and rhodium. Platinum is also a popular investment and can benefit significantly from the rise in the price of gold and silver, offering an alternative safe haven option alongside them. Rhodium, like palladium, is heavily concentrated in the automotive industry, with around 80% of its demand coming from the automotive industry.
On the supply side, it is important to note that PGMs are highly concentrated geographically. The situation is, in short, that two countries dominate production by far, and both are currently geopolitically challenging suppliers. These two countries are South Africa and Russia, as in both platinum and palladium, South Africa and Russia account for around 81% of all production. The situation with rhodium is even more critical, with no less than 94% of production coming from these two countries in 2024 (South Africa 82%, Russia 12%).
Let’s compile the shares of world production in 2024;
Platinum
South Africa 71%, Zimbabwe 11%, Russia 11%, others 7%
Palladium
Russia 41%, South Africa 39%, Zimbabwe 8%, Canada 8%, others 4%
Rhodium
South Africa 82%, Russia 12%, Zimbabwe 3%, Canada 3%, others less than 1%.
There is no known major supply/demand imbalance in platinum or palladium, as there is in tungsten or uranium, for example. Both metals are currently in a reasonably good balance in terms of supply and demand; platinum has a small, approximately 1-3% annual deficit and palladium is hovering around zero.
Of course, if the hybrid car craze I mentioned continues, this additional demand and the slowdown in the growth of the electric car market could definitely quickly turn this market into a deficit. The supply being heavily concentrated in two unstable countries adds to the question marks regarding supply. The largest producer, South Africa, is constantly struggling with electricity and labor problems, in addition to which the country is politically very unstable. Even small possible changes in South Africa will certainly shake the entire world market.
Nickel
Nickel, which at the time of writing constitutes about 16% of the value of Luanga, is a very different metal in terms of its uses than the platinum group metals. The biggest driver of nickel is stainless steel with about 65% of all demand, and nickel is also a widely used for lithium-ion batteries in electric vehicles. In 2024, 15% of total nickel demand went to batteries. It is worth mentioning here that the competing nickel-free LFP battery chemistry technology has been raising its profile in recent years. LFP batteries use iron phosphate (LiFePO4), while NMC batteries use nickel-manganese-cobalt.
Since LFP batteries do not contain expensive nickel, they are significantly cheaper to manufacture. However, LFP batteries have a lower energy density than nickel-based batteries, which often means a shorter range for the same size battery. LFP batteries are more stable at high temperatures and less prone to thermal runaway than nickel-cobalt batteries. Tesla, for example, uses LFP batteries, especially in the rear-wheel drive and shorter-range Model 3 and Model Y versions. What the LFP batteries used by automakers have in common is that LFP batteries are put at the more affordable end of cars. For now, the longer-range versions almost always use NMC batteries. This battery technology situation is worth keeping an eye on, even though the largest driver of nickel is by far steel.
The concentration of the nickel market is different from that of PGMs. While the supply risk in PGMs is geopolitical, in nickel this risk is market policy thanks to Indonesia and Indonesia only. Indonesia has increased its nickel production sixfold since 2010, and currently 61% of the world’s nickel comes from Indonesia. Indonesia has been using the same playbook as China, for example, with rare earths; producing so much oversupply on the market that it drives other producers down when the market price collapses.
Indonesia has taken this strategy a step further by also introducing export restrictions on nickel ore. This has forced mining companies to invest in local smelters, as the mined ore has to be processed locally in Indonesia. This has greatly increased the value of nickel products leaving Indonesia, as the high value-added process remains within the country’s borders.
Although Bravo’s nickel is technically a higher quality sulfide nickel than Indonesian laterite nickel, the nickel market needs to be closely monitored, especially with news from Indonesia, as decisions made there largely determine the global nickel price.
Corporate
In the mining business, I would rather own a mediocre mine with great management than the other way around. However, in the case of Bravo, I am convinced that the investor will get a Tier-1 project in their portfolio, the development of which is in the hands of great and professional management. One good indicator of management commitment is often the number of shares owned by the management, and this test is passed by Bravo’s management team, or rather the company’s CEO Luis Azevedo. It is nice to be on the board of a company where everyone benefits from the raising share price. Of course, in a relatively new company, a high ownership stake is a natural whim and it is very likely that Azevedo’s ownership percentage will decrease significantly as additional financing is obtained along the way.
A few words about the founding of Bravo. Luis Azevedo founded the company and personally financed the due diligence of the Luanga project. Bravo acquired the Luanga project from mining giant Vale in an arm’s length transaction under an option agreement. Under the option agreement, Vale granted Bravo a two-year exclusive right to acquire the Luanga project for USD 1.3 million, plus a 1.0% NSR (Net-Smelter-Royalty) royalty, effective November 12, 2020. Bravo quickly exercised this option and redeemed the project on January 27, 2021, a few months after the option was granted.
On February 9, 2022, Bravo and Bravo Capital (then BPGM Holding Ltd.) entered into a share swap agreement with RD Consulting Ltd and Harpya Ltd. Both companies are controlled by CEO Luis Azevedo. Under the share swap agreement, Bravo acquired 100% of the issued and outstanding shares of Bravo Capital in exchange for the issuance of 52,000,000 common shares at an assumed price of USD 0.05.
In July 2022, Bravo then listed on the Canadian Stock Exchange (TSX) raising a total of C$40,250,000 in funding. The price per share was C$1.75 and exactly 23 million shares were issued. Trading in the company’s shares began on July 25, 2022.
Luis Azevedo
In addition to his extensive professional history, Azevedo is an active advocate for the Brazilian mining industry. Azevedo founded and currently leads the ABPM association, which translates directly to “Brazilian Association of Mineral Exploration and Mining Companies” (Associação Brasileira de Empresas de Pesquisa Mineral e Mineração).
Azevedo is a lawyer and geologist with over 35 years of experience in the mining industry, having graduated from the State University of Rio de Janeiro in 1986 as a geologist and six years later from the Faculdade Integradas Candido Mendes in law. In addition, he holds a postgraduate degree from the Faculty of Law of the Catholic University of Rio de Janeiro, as well as additional studies in corporate law in Toronto. Azevedo is known as a broad expert on Brazilian mining law, and is particularly well-connected in the Carajas region. If anyone knows the intricacies of the law in the region, it is Azevedo.
Azevedo, who has spent his entire career in Brazil, started his career with Western Mining and Barrick Gold, building a strong track record of turning projects into successful mining operations. He later co-founded Avanco Resources Ltd, where he played a key role in developing and operating Brazil’s only new copper mine in the mineral province of Carajas. The Carajas area, where the Bravo project is located, is therefore already familiar to the management team. Management experience has been gained along the way from, among others, Rio Verde Minerals Development and Talon Metals.
Operational management
Simon Mottram - President
Bravo’s president since the company was founded, with connections to Azevedo through their shared history at Avanco Resources LTD, among other things.
Manoel Carlos Cerqueira - CFO
Manoel was CFO at Avanco Resources LTD before moving to the same position at Bravo. So there is a shared history here too.
Paulo Ilidio de Brito - VP Exploration
A veteran who started his career at Western Mining in 1983 and later served as exploration director and vice president at companies such as Talon Metals Corp and Rio Verde Minerals.
Heinrich Muller - VP Technical Services
His work experience includes managing director positions at Anglo Platinum Brazil and Pedra Branca Minerals. The latter, PBM, was a joint venture (JV) between the giant Anglo American and Solitario Resources. He currently sits on the board of directors of the small Jangada Mines, of which Bravo CEO Azevedo owns a fair share.
Alex Penha - EVP Corporate Development
A financial expert, Penha has a strong background in arranging share offerings, financings and IPOs. In addition, Penha has served as a board member of the Brazilian-Canadian Chamber of Commerce (BCCC) and as chairman of its mining committee. He is connected to Azevedo through Jangada Mines and Rio Verde Minerals.
Board
Anthony (Tony) Polglase - Lead Director
A mining veteran with over 40 years of experience. Polglase was the founder and CEO of the much-publicized Avanco Resources LTD. At Avanco, Polglase worked closely with Azevedo, taking the company public, where it was acquired by the Australian company OZ Minerals for approximately AUD 418 million. Other mining experience includes AngloGold Ashanti LTD and Rio Tinto. Polglase was named Mining Director of the Year in Brazil in 2017.
Stephen Quin - Independent Director
Stephen Quin has a whopping 45 years of experience in the mining industry, with expertise in geology, mineral resources and reserves, NI 43-101 technical reporting, general mining and ESG. He has also raised over USD 1 billion in financing and played a key role in over USD 750 million in acquisitions. No clear link to Azevedo through direct work experience.
Margot Naudie - Independent Director
Naudie is a seasoned capital markets professional with over 25 years of global investment experience managing long, short and global commodity portfolios. Her board positions have included chair of the audit and compensation committees. Naudie also sits on the board of Abaxx Technologies, a stockbroker. No clear link to Azevedo through direct work experience.
Luis Azevedo has clearly wanted to build a familiar management team at Bravo, which has been supplemented by a few experienced targeted acquisitions. In particular, familiar figures from the Avanco Resources success story, which ended with a purchase offer worth over 100% premium, worth 418 million Australian dollars, have been brought in. Now the same group, led this time by Azevedo himself, has a potentially multi-billion Tier-1 mine in its hands, and the location is the already familiar Carajas mining area.
Management Ownership and Compensation
Technically, management owns a large portion of Bravo’s stock, but in this context, management only refers to the company’s founder, Luis Azevedo. Azevedo owns over 52 million shares, or nearly 40% of the outstanding shares. Compared to this, the holdings of other insiders are not significant.
Bravo management ownership;
Luis Azevedo - 38.2%
Simon Mottram - 1.08%
Anthony Polglase - 0.78%
Stephen Quin - 0.74%
Manoel Cerqueira - 0.57%
Heinrich Muller - 0.57%
Paulo Brito - 0.50%
Alexandre Penha - 0.45%
In addition, the following stock options are currently active for management remuneration purposes:
Below is the management compensation table for 2022-2024.
Compensations according to the contract upon termination of employment.
Promises made - promises kept?
No matter how much in-depth research you do on a company, nothing beats the experience you get from having a company in your portfolio for years and therefore being monitored on a daily basis. By this I mean that you learn to thoroughly understand, for example, management communication. Does management tend to make overly optimistic promises or does it like to surprise the market positively by giving cautious guidance?
When I add a new company to my long-term portfolio, one of the cornerstones of my due diligence is always to go back in time and try to understand how well management’s word can be trusted regarding promises. And here it is of course important to note that the scale is not binary, as certain promises must be given more weight, and at the same time you must also be aware of the fact that listed companies communicate far too optimistically in principle, and you should especially approach time frames with great caution, no matter what the company is. Outright lying and misrepresentation is of course a red flag, and such a company is not worth buying at all, but even a great company can constantly issue slightly overoptimistic press releases.
Let’s see how Bravo has kept its promises (2024-2026)
By the standards of a typical junior miner, Bravo has been able to keep its promises really well, and the deadlines have not been stretched too much. The slight delay with the MRE is explained by the continuation of mineralization and the additional drilling that resulted from it. The intention was to include the new data in its entirety in that study. Despite this, the delay was only less than two months. Of course, it is also important to note that drilling program schedules cannot really be set in stone (no pun intended) because if mineralization continues and continues, the drilling program will probably also be stretched.
The next time Bravo is scheduled to release significant news is in the third quarter of this year, when it is scheduled to move from PEA to PFS. A strong PFS would reduce the technical risk on the project enormously, and Bravo’s stock could be permanently priced with a valuation that reflects this. So let’s hope that management maintains its good track record and releases that study at the promised time.
Risks
Although only a very few companies make it into my portfolio after due diligence, it does not eliminate the fact that you can also write a long bearish thesis about every company. Bravo is no exception in this regard, so here are some risks the company has.
Bravo being acquired too cheaply
Luis Azevedo does indeed own 38% of all Bravo shares, which means that it is practically impossible for him to completely exit this position without selling the company. This may encourage the management (Azevedo) to sell the company at a relatively low price in pursuit of personal gain. With 38% of the voting rights, it is also reasonably clear that Azevedo’s word is law, when it comes to Bravo.
Bravo’s stock free float is also unusually low, so even with just possible trimming, the shares dumped on the market by Azevedo can have a surprisingly large impact on the share price. The investor then has to think about whether the dip is buyable, or whether Azevedo is liquidating because something is broken.
High G&A/Exploration ratio
G&A expenses together with SBC (share based compensation) have been a bit high in 2024 and 2025 (around 38% in 2025) when reflected directly in drilling costs. SBC has been capitalized in the exploration costs of the Luanga project, after all. For junior miners operating without revenue, so it is of course typical and often the only option to attract the necessary expertise by distributing shares.
I don’t see this as a red flag yet. If higher compensation gets you the right people to lead the project, it will be worth it in the end. The company has over 130 million Canadian dollars in cash and is getting money from the market on good terms. In dollar terms, we are still discussing about pennies, because we are talking about a project that could be worth billions of dollars. However, I will keep an close eye on this ratio.
Overoptimistic PEA
I don’t really have anything to add to this brilliant tweet thread by MSI, except of course that metal prices have been risen a lot July 2025. However, that doesn’t change the fact that there were several aspects in the PEA that clearly inflated the numbers.
So why own this? I own Bravo because the project is still so cheap at these metal prices, even with higher discount factors (NPV10, NPV12), and this gives me the necessary margin of safety. I’m waiting for more realistic numbers from the PFS that will come out in the summer, and I want to get more precise answers regarding the total costs of the project, i.e. opex and capex. How the overoptimistic PEA will turn into PFS is currently the number one question mark for me and also the biggest risk.
P.S. I called MSI’s Zurich skyscraper office directly on my hotline and despite his rant, he is still long. MSI is a must-follow account on Twitter, by the way.
Early stage project
This could actually have been combined with the previous risk, but let’s put it in its own section. It is clear that a limited amount of technical knowledge is a huge risk for every mining project. Although the PEA provides certain financial milestones for the project, we are still talking about a relatively raw project, the development of which has not yet been decided.
If the Pre-Feasibility and Feasibility Study confirm the same things as the PEA, but manage to add a lot of technical detail and answer the questions left by the PEA, then at that point we can start talking about how good the project really is and how close to NAV the project can be priced. However, there is still a long way to go.
Metals
Every mining project is associated with one risk that is completely beyond the company’s control; the market price of metals. In my opinion, the biggest risk with the Luanga project is the high growth in electric car production and the consequent large decrease in demand for PGMs.
A temporary risk may also arise from the end of the war in Ukraine. However, let’s make it clear right away that this investment thesis is not based on the war in Ukraine continuing, as the world market is just about in balance even when taking Russian production into account. I definitely hope for peace in Ukraine, even though it may cause momentary volatility in prices.
Summary and expectations
In my portfolio, Bravo falls into the category of longer-term holds, and the intention would be to own the stock at least until the FID stage. FID means the final investment decision and is a confirmation that the project has after all been found to be economically viable and that it will be built. I think Luanga is blessed with a great location, and it is being developed by a very professional and competent team that has convinced me, at least. Another big plus is that since Bravo needs to build very little general infrastructure in the Carajas mining area, the company can focus fully on building its own holding in the most optimal way possible. The location of the mining project really does matter.
When all the pieces are put together, I think the market is discounting Bravo’s share price too much. Of course, part of this can be completely justified by the spike in general market fear, considering the situation in the Middle East. The situation in Iran has hit mining stocks particularly hard.
Since the idea of PGM exposure outside of South Africa and Russia has interested me for a long time, I finally decided to jump on board Bravo in early March, and the stock currently has 9.2% weighting in my portfolio at an average price of C$3.68.
Bravo’s share price at the time of writing is C$3.37 and its market capitalization is approximately C$460 million or US$332 million. With the latest funding, the company has US$96 million in cash, giving a debt-free company enterprise value (EV) of approximately US$240 million. Metal prices currently look like this;
Platinum US$2,065/oz
Palladium US$1,550/oz
Rhodium $US$10,190/oz
Nickel US$7.75/lb
Gold US$4,787/oz
Using the NPV8 base case ($US2,250M), which is the sale of concentrate, as a benchmark at these prices, the EV/NPV is only 0.104x. Bravo also has the option to develop the project in another way (vertical integration), and the NPV of this method would be approximately 50% higher than the base case. I personally consider the concentrate sale to be the more likely option, and I want to calculate my own safety margins based on those numbers. However, if Bravo ends up choosing the latter, vertically integrated method, I will gladly accept that as a bonus.
Companies in the PEA stage are usually valued in the range of 0.10x - 0.30x, so compared to this, Bravo is very cheap even at a higher NPV10 discount factor (0.127x). I think the company should not be so cheap, especially now that the balance sheet is full of cash, and there is no need to fear new share issues anytime soon.
Margin of safety gives you breathing room
I try to ensure that every investment I make has the highest possible margin of safety. It is very forgiving when you make mistakes in your investment thesis, the company’s expenses get out of hand or metal prices develop unfavorably. Margin of safety is actually the most important single aspect in my own investment philosophy and for this reason I usually stress companies with NPV10 or NPV12 calculations, and I basically assume that all projects will be behind the initial schedule. If even after these, I still think the quality company look cheap, I can happily buy the stock.
When a project that does not require a huge amount of infrastructure construction is valued at 0.127x NPV10 in the PEA phase, I think the margin of safety is sufficiently large. At an even higher NPV12, the EV/NPV is only 0.156x, and NPV12 already prices in quite a few worse turns.
At this stage of the project, I think NPV8 should be forgotten, and Bravo should be valued at either NPV10 or NPV12, as this gives the investor more leeway in an early-stage project. A conservative valuation is your personal safety net if the numbers go down in PFS, or other setbacks occur. Buying a stock cheaply also protects against fluctuations in metal prices.
Future expectations and possible timelines
If the PFS to be published in the summer answers the questions left by the PEA and more technical information is available about the project, I believe that the market will dare to price Bravo a little richer, and NPV8 could became a valid discount rate (for me). EV/NPV8 could climb to a range of 0.3x - 0.45x after the PFS, which would imply a valuation (EV) of $US675M - $US1,012M at current metal prices. The market cap could be $US600M - $US900M, which with the current number of shares (144M) would imply a share price of C$5.60 - C$8.62.
If the PFS is positive, Luanga will proceed to the FS phase. However, before FS, the plan is to drill quite a bit of regional gold-copper targets, and possibly also expand the PGM deposit. The price tag for the Phase 5D drilling program is already at US$5.7 million and it is planned to drill over 14,000 meters.
When the drilling programs and FS are available to investors, the risk of the project will hopefully have been reduced quite a bit, as the only things missing are probably the project financing and the last possible mining permits, which must be taken care of before FID.
In the optimal situation at this stage, we are talking about H2/2027. I would personally estimate a valuation of around 0.45x - 0.60x EV/NPV8 after FS and once the financing and necessary licenses are in place, the project can be priced between 0.60x - 1.00x EV/NPV8. The closer the project is to production, the more de-risked it is, and better it can be valued. Of course, the price development of the metals and the general mining sentiment have a say in this.
Bravo currently has around 144 million shares outstanding (fully diluted). I would think that the current cash of around $100 million (US) would easily cover everything else except the construction costs of the mine itself. The base case, i.e. the sale of concentrate requires around $US500 million capex. If the financing ratio is relatively standard for greenfield mines (40% equity/60% debt), this would mean selling shares worth around US$200 million.
Bravo has a great history with previous placements, and has always managed to sell shares to the market at a higher issue price than previously, so I think the valuation base case can be considered with around 200 million shares, which would mean around 56 million more shares to the current number of 144 million.
H2/2027-H1/2028 is my own possible target for the project financing to be taken care of, the FID to be completed and the construction of Luanga to begin. At this point, at the latest, NPV8 is already a sufficient discount rate, and Bravo could be priced at 0.6x - 1.0x of Luanga NPV8.
Scenarios for a couple years out and with 200 million shares outstanding
Metal prices at today’s level = NPV8 $US2,250M, so a market cap of $US1,350-$US2,250M. The share price would be C$9.28 - C$15.46, or +175%-358% from these levels.
Metal prices fall 35% (Bravo’s basket $1554/oz 4E PGM), back to PEA level = NPV8 U$1,250M, so a market cap of $US750M-$US1,250. The share price would be C$5.15-C$8.59, or +52%-154% from these levels.
Metal prices fall 20% from PEA level = NPV8 $US990M, so a market cap of $US594M-$US990M. The share price would be C$4.08-C$6.80, or +17%-96% from these levels.
In the best case scenario, Bravo is a clear multibagger within a few years. The company’s current valuation gives such a good margin of safety that I couldn’t help but to buy some shares, especially since PGM exposure has interested me for some time. For Bravo to become a dent in a portfolio with a 20-month hold, it would require a vigorous collapse of the PGM market, or Luanga being revealed as a much weaker project than expected.
These are all of course possible scenarios, but risks are always gonna part of investing, and you can’t escape them. However, we’re playing with probabilities here, and I think Bravo’s R/R is good enough at current prices. The risks are also balanced by the optional upside brought by large drilling programs (especially gold-copper), but even without that, the project looks good enough in light of the current numbers.
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