Halo Minerals: Broker Sees 377% Upside as Playa Verde Advances

A new broker note has laid out the case for a serious re-rate at Halo Minerals (LSE:HALO).

Equity Development has initiated coverage with a 46p fair value estimate, compared with Halo’s current share price of 9.65p— equating to potential upside of around 377%.

Notably, that valuation is not based on blue-sky exploration hopes or aggressive assumptions…

The broker’s core fair value uses a 10% discount rate and adjusts for the capital needed to build the project, as well as future asset payments. On an 8% discount-rate basis, more in line with some copper peers, the fair value rises even further to 61p per share—implying upside of more than 530% from today’s share price.

In other words, the valuation gap is clear—the question now is whether Halo can now deliver the milestones needed to close it. Let’s look in more detail…

Unique tailings opportunity

Halo is not a blue-sky exploration story.

The company’s flagship asset is the Playa Verde copper-gold tailings project in Chile. This is a technically advanced project with a defined resource, ore reserve, approved Environmental Impact Assessment and a clear pathway towards a final investment decision.

That puts Halo in a different category from most junior copper names. Rather than trying to find a new deposit from scratch, Halo is focused on reprocessing legacy mine waste.

This means the company is targeting material that has already been mined and processed once, but still contains recoverable copper and gold.

Tailings projects usually have more defined material, lower geological risk, lower capital intensity and shorter development timelines than building a conventional hard-rock mine from scratch.

Equity Development’s note highlights Playa Verde’s 53.4 million tonne JORC-compliant resource grading 0.24% copper. Within that, 32.2 million tonnes is classified as ore reserves.

The current plan is to dredge the tailings and recover copper cathode and copper concentrate, with by-product gold also expected. At full capacity, Halo plans to process around 5 million tonnes of tailings per year and recover roughly 8,640 tonnes of copper annually.

Meaningful Economics

The project economics are meaningful for a company of Halo’s current size.

Based on the 32.2 million tonnes of ore reserves alone, Halo’s Competent Person’s Report gives Playa Verde a post-tax NPV10 of US$154.1 million and an IRR of 50.9% (based on copper price of $5.30/lb and gold price of $4,300/oz).

As per the Company’s CPR, the initial mineable resource (base case), which includes the ore reserves plus 2.6 million tonnes of additional mineral resources, the post-tax NPV10 rises to US$164.1 million, with an IRR of 51.4% (based on the CPR assumptions of $5.30/lb of copper and $4,300/oz of gold).

• For a company with a £10.7 million market cap, those project-level numbers are difficult to ignore.

Crucially, Equity Development is not simply taking the project NPV and comparing it with Halo’s market cap. The 46p fair value adjusts for the capital expenditure needed to build the project and the asset payments due to Central Asia Metals once production milestones are reached.

That makes the valuation more grounded, while still leaving a substantial gap between the current share price and the analyst’s estimate of fair value.

Optimum Timing

There is also a useful copper price angle here.

In a recent RNS Reach, Halo highlighted that spot copper and gold prices are currently materially above the assumptions used in its Competent Person’s Report.

• Applying the same CPR methodology at approximately US$6.35/lb copper and maintaining the same US$4,300/oz gold price assumption indicates an NPV10 of around US$241 million and an IRR of 73%. That’s around US$87 million higher than the reserve-only NPV in the CPR.

This is not something investors should treat as guaranteed value today. Copper prices move, assumptions change and Halo still has work to do.

But it does show how much leverage Playa Verde could have to stronger metal prices.

As Equity Development highlights, the broader backdrop for copper remains supportive, with demand linked to electrification, grid expansion, EVs, AI and defence spending, while new supply remains difficult to bring on quickly.

Looking Forward

Halo is also well funded for the next phase.

The company raised £4 million gross at IPO. According to Equity Development, after planned spending on updating the DFS, Halo should still have around £2.5 million of uncommitted cash available.

That gives the company room to advance the work needed to move Playa Verde towards a final investment decision.

From here, the next milestones are clear.

Halo is targeting an optimised DFS and final investment decision in the second half of 2026. It has also started the maritime concession process to unlock potential organic growth within its existing mining licenses, filed for beach mining permissions and is progressing development funding discussions.

If everything goes to plan, first production could potentially start in 2028.

There are still risks. Halo needs ancillary permits following its EIA approval, project finance, updated technical work and successful execution. The project is not built yet.

But the valuation gap is hard to ignore.

·       At 9.65p, Halo is trading at a fraction of Equity Development’s 46p fair value estimate. And if the company keeps moving Playa Verde towards a final investment decision, the market may start to take that gap more seriously.

For more….

• Read Equity Development’s Initiation Note in full here.

• Keep an eye out for our upcoming interview with Equity Development’s Nick Hatch for more of his thoughts on Halo and its upside potential—we’ll post it on our X channel when it’s ready!