Horseshoe Metals (ASX: HOR) has found itself the subject of a recent broker report placing a Speculative Buy recommendation on the company.
The following is an extract from the report.
The Rinaldi copper discovery at Kumarina opens up a range of possibilities for Horseshoe Metals. Subject to ongoing drilling the 300 metres strike at Rinaldi drilled so far to less than 100 metre depths might not contain enough copper to justify development on its own, but it is open in nearly all directions and it shows the right conditions exist for a large copper deposit formation in the area.
If Rinaldi is confirmed to be a sediment hosted copper discovery then Horseshoe and other Collier Basin explorers could expect increased attention from major mining companies looking for extensive tracts of unexplored, prospective geology.
Horseshoe’s work at Kumarina is in its early stages. There are other workings and an apparent geophysical signature associated with Rinaldi which could lead to further discoveries in reasonably short order. However the geology is generally not well understood and a multi–year exploration program is now justified at Kumarina.
The Horseshoe Lights project, with over 90,000 tonnes of copper in inferred resource, is probably not far off the commercial threshold and there are several avenues through which the resource can be increased. The most enticing of these are the prospects south east of the pit where there is real potential for new massive sulphide copper discoveries.
Both Kumarina and Horseshoe Lights are well positioned for development. Subject to exploration progress at each project, at 120 kilometres separation there may be some sense in sharing facilities such as a concentrator to reduce unit capital costs.
Horseshoe Metals has had remarkable success since floating mid 2010. Prospects at Horseshoe Lights and Kumarina have been advanced to the point that forthcoming drill programs should make the development potential of each site clear, and secure full funding for the next phases of each project.
- Horseshoe Metals has discovered consistent sulphide copper mineralisation at Kumarina.
- Copper grades averaging better than 2% over true widths of up to 20 metres, intersected over 300 metres of strike length in a maiden drilling program, indicate the Kumarina project has substantial tonnage potential.
- Kumarina is in a belt not previously considered highly for commercial mineral discoveries. After Horseshoe Metals’ early work, and the success of others in the wider region, Kumarina now deserves some well funded, determined exploration.
- Horseshoe Metals began a follow up drilling program at Kumarina in December 2011.
- Horseshoe Metals almost doubled the copper resources at Horseshoe Lights in 2010, to 91,000 tonnes of copper.
- Forthcoming drill programs will test several opportunities to further increase resources at Horseshoe Lights. Massive sulphide prospects south-east of the pit are likely to be the headline acts.
- The bulk of Horseshoe Lights resources and drill targets are in compact open pit positions within a mining lease. Even moderate success in drilling the known targets could see the project past the economic threshold.