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  • Metro Mining Receives Speculative Buy, $0.38 Price Target From Broker

    Metro Mining (ASX:MMI) recently received a Speculative Buy and $0.38 target from Argonaut.

    With Metro last trading at $0.09, the target price provides a significant potential upside of more than four times the current value.

    The following is an extract from the report.

    QUICK READ

    Metro Mining (ASX:MMI) is developing the Bauxite Hills project in the Cape York Peninsula, QLD, Australia.

    This bauxite project ticks a lot of boxes with low development capex, high operating margins, long life, low complexity and near term development potential.

    Bauxite Hills stands to benefit from growing seaborne demand driven by Indonesian and Vietnamese export bans and declining domestic Resources in China.

    Located close to Rio Tinto's Weipa project, the project can leverage off the Cape York bauxite brand and has the advantage of being a short distance to China, the target market.

    Argonaut assigns a SPEC BUY recommendation and $0.25 target price, with a view that MMI offers high margin, low sovereign risk exposure to bauxite.

    EVENT & IMPACT | POSITIVE

    Bauxite Hills positive PFS:

    Bauxite Hills consists of two mining pods with a global Reserve of 48.2Mt at 38.4% available/extractable alumina (A.Al2O3) and 6.4% reactive silica (RxSiO2).

    In February this year, MMI released a positive PFS for 2Mtpa direct shipping ore (DSO) over a 21 year mine life.

    Low production costs of $26.7/t generate high operating margins against an average forecast price of US$44.8/t (A$55.3/t) FOB.

    Pre-production capex is low, estimated at $27.4m. Consequently the project generates a strong post tax NPV15 of $197m ($148m for a 15yr mine life) and an attractive 88% IRR.

    Simplicity:

    Planned operations consist of low strip (>0.1:1) free dig mining, crushing and screening, 5-10km haulage to a barge loadout facility, then transport down the Skardon River for tranship loading to bulk carriers in the Gulf of Carpentaria.

    The project requires little infrastructure with only crushing and screening prior to export.

    Ripe for the market:

    Bauxite prices have enjoyed an upward trajectory since 2009 and have accelerated since export bans were imposed by Indonesia and Vietnam.

    China is the prime market for MMI's moderate-high A.Al2O3 bauxite, given proximity to market and growing demand.

    Internally, China's Resources are declining in both tonnage and grade, driving demand for high quality, low transport cost imports.

    Timing and Opportunities:

    MMI is targeting first production in late-2016 following completion of environmental permitting, Native Title agreements and offtake.

    MMI is believed to be in discussions with several of China's largest Aluminium producers regarding off-take.

    It is expected that one of these parties is Xinfa, who currently hold a significant equity stake and Board seat.

    Following Argonaut's recent site visit, we believe there is an opportunity to partner with Bauxite Hill's privately owned neighbour, Gulf Alumina, to increase scale, gain access to established infrastructure and reduce capex.

    RECOMMENDATION

    Argonaut assigns a SPEC BUY recommendation to MMI. Our target price of $0.25 represents a 30% discount to our NAV15 valuation of $0.38/sh, accounting for permitting and off-take risk.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

    Jul 03 2:56 AM | Link | Comment!
  • St George Mining Hits Copper, Zinc Sulphides At Desert Dragon Central

    St George Mining (ASX:SGQ) has intersected thick multiple ultramafic units and sulphide-rich sequences in its second hole at Desert Dragon Central, located at the wholly-owned East Laverton Property in Western Australia.

    Elevated copper sulphide mineralisation was visually identified, and detailed geological logging and XRF analysis of the drill hole is ongoing.

    The first hole intersected a massive nickel sulphide stringer.

    Assays will be reported in the coming weeks with potential for significant intersections of mineralisation to be prioritised for faster processing.

    John Prineas, executive chairman, commented: "The preliminary results from the first two drill holes at Desert Dragon are very pleasing.

    "The first hole intersected a massive nickel sulphide stringer which we are now following up by drilling the basal contact below that nickel intersection.

    "The second hole has intersected copper and zinc sulphides, which look very interesting.

    "Our best drill targets have yet to be drilled, so we have tremendous exploration potential ahead of us."

    VMS potential

    The VMS potential at the East Laverton Project was highlighted through the results of the 2012 reconnaissance drilling completed by BHP Billiton Nickel West as part of the previous Project Dragon farm-in arrangement.

    That drilling intersected thick metal‐rich and sulphide-rich sediments with elevated levels of zinc and copper mineralisation.

    St George said that the latest VMS-style mineralisation intersected appears to be more copper dominant which may indicate that the drill hole is located in a more central position within the VMS system.

    The strong gravity anomaly at Desert Dragon Central, is now a high priority target for follow-up drilling.

    A new drill hole is being planned to test the centre of the positive gravity feature.

    Analysis

    St George's highly prospective drilling program testing of EM conductors for massive nickel sulphides has delivered some early promising results.

    The latest hole (number two) has intersected copper and zinc sulphides, which followed a massive nickel sulphide stringer in the first.

    Assays will be reported in the coming weeks with potential for significant intersections of mineralisation to be prioritised for faster processing.

    Adding intrigue, St George said its best targets are still to be drilled.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

    Jul 03 2:54 AM | Link | Comment!
  • Applabs Technologies Director Rocco Tassone Continues On-Market Buying

    Applabs Technologies (ASX:ALA) non-executive director Rocco Tassone has further increased his indirect interest by buying $23,100 worth of shares in on market purchase.

    His indirect interests acquired 220,000 shares at $0.105 each, taking his total holding up to 835,000 shares.

    Tassone previously acquired 210,000 shares between 15th June and 19th June.

    The company has also received a Price and Volume Query from the ASX after its shares reached an intra-day high of $0.13 on Thursday, 2nd July, from an opening price of $0.09 on Tuesday, 30th June.

    The company said that it is not aware of any information to explain the recent trading.

    Applabs is selling part of its Fee for Service division to Dapper Apps Pty Ltd, allowing it to continue its core focus of maturing its strategic investments.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

    Jul 03 2:52 AM | Link | Comment!
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