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Mining Group: RM Research Recognises Comval Project's Potential

Mining Group (ASX: MNE) has received an accumulate recommendation from RM Research.

The following is an extract from the report.

Site Visit Confirms Potential

- RM Research conducted a site visit (23 May 2012) on the Company's flagship Comval Project situated approximately 90 kilometres north of the regional city of Davao, the capital city of Mindanao (Philippines).

The project is strategically located on the eastern flank of the prolific Philippine Fault known to host a number of significant copper and gold deposits (Dilwalwal, 10.2Mt @ 9.6 g/t Au; Maco, 3Mt @ 5.9 g/t Au; Amacan, 110Mt @ 0.30 % Cu, 0.40 g/t Au; King King, 962Mt @ 0.25% Cu, 0.30 g/t Au; Co-o 6.3Mt @ 9.6 g/t).

- After acquiring an 80% interest in the Comval Project from TSX-V listed Cadan Resources in January 2012 (which included cash payments of $3.0 million, and issue of 2.6 million Shares in the Company), Mining Group is in the early phase of follow up exploration on key prospects including Tagpura, Bayag Bayag and Maangob.

- The targets are skarn hosted Cu+/-Au mineralisation (Tagpura, Bayag Bayag, Maangob) and porphyry hosted Cu/Au (Kalamatan).

Drilling Underway

- Drilling is currently underway at the Tagpura and Bayag Bayag Prospects.

- The current program comprises approximately 3,000 metres of diamond core, with assay results due in July-August 2012.

Exploration Target

- Our exploration target over the next 12-24 months is for clusters of Cu+/- Au skarns hosted within both diorite intrusions and altered limestone and volcanic units totalling perhaps 8-12 Mt each.

- RM Research considers that global resources in the order of 200,000-300,000 tonnes of contained copper+/- gold credits could be sufficient to sustain a standalone operation using conventional flotation methods. In other words, JORC Resources of perhaps 30-40Mt grading 0.80-1.0% Copper equiv (including Au, Ag credits).

Economic Model

- CAPEX for a 3Mt p.a. operation could be in the range of A$200 million (including working capital) in a potentially low operating cost environment

Price Catalyst

- Near term share price drivers - diamond drill results from Tagpura and Bayag Bayag due 2H CY 2012.

Action and Recommendation

- Accumulate between 20 to 30 cents.

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