Bluejay Mining (JAY), (previously named FinnAust Mining) is an AIM listed resources exploration company which currently has a number of prospective licences in Greenland, Austria and Finland. The current focus of the company’s activities is the Pituffik Titanium Project in Greenland which has just seen a maiden JORC resource statement completed.

• Shares surge based on continued hope at Pituffik

  Bluejay shares have risen from 0.55p in December 2015, just prior to the announcement of the company’s initial acquisition of a stake in the Pituffik project, to the current 13p. This makes the company one of the best performing on AIM over that period. The valuation is now over £100 million on a fully diluted basis.

• However, we have numerous concerns over what is the company’s flagship asset

  There are many challenges related to operating a mine in Greenland, mainly due to the harsh climatic conditions and remote location. Bluejay’s JORC resource for Pituffik has underwhelmed and of course the company needs to raise project finance to bring the asset to production. We note related party selling, in particular Western Areas exiting in full at 12p in early June and that is a strong smoke signal to us.

• Shares materially over-valued in our opinion

  We believe that Bluejay is materially over-valued for the stage that the company is at. It is in need of material equity and debt financing to progress to dredging activities in any volume. We believe the shares remain elevated as a consequence of the relatively limited free float. Our price target based on a realistic DCF calculation is 5.3p and accordingly we place a rare Conviction Sell recommendation on the stock.

• DISCLAIMER

  For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

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