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Vital Metals Targets Gold Extensions From New Burkina Faso Drilling

Vital Metals (ASX: VML) will target extensions to the bonanza grade mineralisation identified at the company's Burkina Faso gold projects.

Drilling will cover 2300 metres at the Kollo Gold Project on the Doulnia Tenement (Vital 60%, Ampella 40%) and the Boungou South Gold Project on the Zeko Tenement (100% Vital).

Previous drilling at Vital's Burkina Faso gold projects has discovered bonanza grade gold such as; 5 metres at 60.36g/t gold from 75 metres, including 2 metres at 128.5g/t gold, and broader intersections such as 44 metres at 6.39g/t gold from 8 metres, including 4 metres at 58g/t gold.

Drilling on the Kollo Shear zone will be focused on testing the undrilled area between Kollo South and Central.

Mark Strizek, managing director, said that they were extremely pleased to have Geodrill on board for the drilling.

"Their rig is track mounted and will allow us to get to places we haven't been able to access in the past.

"Our exploration team in Burkina Faso are extremely keen to follow up the exceptional high grade gold intercepts we had from the last program.

"In reviewing the program, I am optimistic about the potential for this drilling program to intersect high grade gold mineralisation and for the known limits of the gold mineralisation to increase."

Gold assay results from the drilling program are expected to be available by March 2013.

Analysis

Vital had $2.5 million in cash at the end of November 2012, and with a market cap. of $6 million, the company has an enterprise value of just $3.5 million - providing plenty of potential upside in the stock if bonanza grade gold continues to be discovered.

Another share price re-rating catalyst for Vital will come from the Definitive Feasibility Study for its Watershed tungsten project in Queensland, which is forecast for completion in the March quarter of 2013, with Vital's end goal being production by 2014.

Interest in Watershed is already very high, with five Japanese companies having already declared their interest in the project as potential partners and offtake buyers.

Proactive Investors considers Vital to be undervalued based on these potential price driving announcements to be released in early-2013, and therefore the current $0.025 is unlikely to remain on offer next year.

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