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Low Entry Cost, High Asset Value

Virtus Lloyds Minerals Holding (VLMH) has acquired 100% equity in CHEMAF Group Ltd. (HQ: Katanga Copper Belt, DRC) for a consideration of up to USD 30 Mn, of which Lloyds Metals & Energy Ltd’s effective share is USD 14.7 Mn (49% stake in VLMH). This acquisition reflects a classic distressed-asset opportunity. With ~USD 900 Mn of existing liabilities assumed at the asset level, the structure provides LLOYDSME exposure to a large-scale copper– cobalt platform with limited upfront equity. This approach enables participation in a high-potential asset base while relying on operational execution to unlock value from a previously capital-constrained project

De-risking the DRC via Thriveni’s MDO Model

LLOYDSME is not merely a financial investor in the DRC; it is the designated "Strategic Operator". While the US mining fund, Orion, provides the heavy-lifting debt financing (USD 900 Mn non-recourse debt for refinancing existing debt + USD 450–500 Mn non-recourse debt for expansion), LLOYDSME manages the entire operational cycle. This "Asset-Light, Operation-Heavy" approach utilises the proven MDO (Mine Developer and Operator) capabilities of Thriveni Earthmovers and Infra Private Limited (TEIL) to scale up capacity from the existing 20K and 4K TPA to a targeted 70K TPA Copper and 16K TPA Cobalt, respectively, by FY30E

Capped Capital Outlay vs. Massive Revenue Scalability

The CHEMAF acquisition is structured as a masterclass in capital efficiency, allowing LLOYDSME to secure a global critical minerals vertical with a revenue potential of INR 100–120 Bn post-expansion (with an upside in a favourable commodity environment), while maintaining a healthy balance sheet in India. While the total expansion program requires a USD 750–800 Mn capital outlay, the heavy-lifting is professionally tiered through a sophisticated financing architecture: a USD 450–500 Mn non-recourse facility provided by Orion Resource Partners (Strategic Financier) and ~USD 300 Mn (assumed unsecured debt investment) from VLMH. As a result, the direct cash outflow for LLOYDSME’s is strictly capped at ~INR 14 Bn (USD 147 Mn) over the next four years. This phased investment — staggered at a manageable ~INR 3.5 Bn annually from FY27E to FY30E — guarantees that the core domestic steel expansion at Ghugus and Konsari remain unaffected.

Subsidiary (Thriveni) Upside: The Thriveni MDO mandate for CHEMAF’s existing capacity contributes an immediate INR 5,000 Mn in incremental revenue and INR 1,500 Mn in EBITDA on an annualised basis. We anticipate a significant inflection point as capacity scales up towards 70,000 TPA of copper and 16,000 TPA of cobalt, with full financial consolidation expected in FY31E, following FY30E commissioning

Investment View & Target Price We maintain our BUY rating on LLOYDSME with no change in target price of INR 1,730, representing a 36.1% upside. Our valuation incorporates a structured capital allocation towards the Virtus JV (VLMH), modelled as a long-term investment. We project cumulative investments starting at INR 3,500 Mn in FY26E, scaling up to INR 14,000 Mn by FY30E, in addition to the initial outflow (to buy equity) of ~USD 14.7 Mn (49% of USD 30 Mn). This capital functions as a yield-generating instrument, delivering a 10% annual interest return that accrues directly to PAT, while our standalone Revenue and EBITDA estimates remain robust and unchanged.

DRC Copper-Cobalt JV — Free Optionality: We currently assign zero value to the Copper-Cobalt JV in our SOTP, maintaining a conservative stance against early-stage execution risks in the DRC. However, the project represents significant "hidden optionality.

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