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YTC Resources: Hartleys places $0.90 price target, rated "Buy"

Hartleys Research have written a new broker report on YTC Resources (ASX: YTC) and have placed a $0.90 share price target, rating the stock a "Buy". Below is an extract of the report.

Company Data

Share Price (last): $0.65
Valuation: $0.81
Price Target: $0.90
Issued Capital: 248.4 million
- fully diluted: 253.8 million
Market Cap: $161.4 million
- fully diluted: $165.0 million
Cash (est): $31.0 million
EV: $130.4 million

Record Copper Drill Intercepts at Nymagee

On-going drilling by YTC Resources at its Nymagee project (YTC 90%), located 100 kilometres southeast of Cobar, NSW continues to intersect high-grade copper.

The latest drilling has returned the strongest copper results to date with one diamond drill-hole intersecting:

- 92 metres (60m true width) at 1.5% Cu from 88m (Southern Footwall Zone);
- 18m (13m true width) at 6.3% Cu, 0.65g/t Au and 26g/t Ag from 294m (Main Lens);
- 4.5m (3.2m true width) at 8.4% Cu, 0.78g/t Au and 38g/t Ag from 317.5m and 2.7m (2m true width) at 4.6% Cu, 0.81g/t Au and 18g/t Ag from 329.9m (Main Lens fault offset).

Strong copper widths and grade

The latest drilling, designed to test the shallow Southern Footwall Zone (SFZ) and the Main Lens at moderate depths has returned record grades and widths.

The SFZ intercept is within open-pittable depths and the Main Lens has provided the widest massive sulphide observed to date, which provides encouragement for the future potential mining.

The results highlight a significant zone of structural thickening that may be affecting both the Main Lens and Footwall Zone.

Interestingly, two narrow massive sulphide zones, interpreted as structural repeats (fault offsets) to the Main Lens carry even higher copper grades, highlighting a zone of copper enrichment.

Shallow and deep drilling programs underway

Nymagee remains open at depth and along strike with drilling approvals now received to test the shallow copper targets over 600m of strike and for depth extensions (deep drilling approvals have already been received).

YTC has identified shallow copper mineralisation over broad intervals at the southern and northern end of the historic mine and with more high-grade copper lodes confirmed through deeper drilling.

The company expects to complete 7,000 metres of RC and diamond drilling over the shallow targets, with drilling commenced. Three rigs are currently active on site.

Nymagee is evolving into a significant copper deposit

Nymagee is evolving into a significant copper deposit, with the mineralised system containing multiple high-grade copper lodes which should result in a longer mine life and potentially enable increased production rates (once
developed).

YTC believes that the Nymagee system may be similar to the nearby world-class CSA deposit which has yielded over 1.5 million tonnes of copper and extends to depths over 1.5km with multiple high-grade copper lodes.

Strong lead-zinc-silver lenses are also developing within the Nymagee system which has the potential to provide further credits and improve project economics once in production.

The drilling at Nymagee continues to de-risk and extend the ore body. The deposit has not been closed off by drilling implying further resource growth to come. We have a price target for YTC of 90 cents per share based on our weighted valuation development scenario for Hera and Nymagee. We have upgraded our recommendation for YTC Resources Limited to a Buy.