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Xceed Resources: Broker Increases Price Target To Double Current Share Price

May 07, 2012 1:21 AM ET
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Seeking Alpha Analyst Since 2009

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Xceed Resources (ASX: XCD) has received an increased price valuation of A$0.33, double its current share price, in a broker update following the release of its March quarter results.

Speculative Buy

BFS March 2012 quarter, confirms viability of Moabsvelden:

Xceed Resources Ltd is a South African coal company focused on the development of the Moabsvelden Thermal Coal Project immediately east of Johannesburg, together with several other earlier stage exploration and development projects in the Witbank region.

Research Summary

Xceed Resources Ltd (XCD, speculative buy, target price A$0.33/sh, previously A$0.30/sh) announced its latest quarterly result with updates on its 74% Moabsvelden thermal coal project, and findings from recent exploration drilling and washability testwork at its Roodepoort and Bankfontein projects (acquiring 70%).

Our NPV has increased to A$0.33/sh (up from A$0.29/sh) based on revised commodity and exchange rate assumptions, and moving forward our calculation date by one quarter.

Key catalysts include: (1) completion of the Moabsvelden Environmental Impact Assessment (FY12Q4), secure financing (FY13Q3); and (2) completion of the maiden resource estimates and scoping studies at Roodepoort and Bankfontein thermal coal projects are expected later this year (which should ultimately provide further upside to our NPV).

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