What the Analysts Say

WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.

Website: www.breakawayresearch.com

Company: KBL Mining Limited (ASX: KBL)

KBL Mining (ASX: KBL) is an Australian mineral production and development company largely focussing on the Mineral Hill Mine in western New South Wales.

They are currently operating at around 250,000 to 300,000 tonnes per annum from underground, producing both copper/gold/silver and lead/gold/silver concentrates.

Current resources and reserves give Mineral Hill a potential life of at least 10 years.

KBL is also looking at developing the Sorby Hills MVT lead/silver deposit in Western Australia.

The mineralisation is on granted Mining Leases, and the proposed first stage operation as considered in the PFS has received environmental approvals from the State Government.

Next steps will include completing a BFS, followed by funding and then development of what could ultimately be a long term operation.

Following successful cost cutting measures, KBL is now concentrating on a clear strategy to boost revenue at Mineral Hill.

These include the recently added lead circuit (first lead revenue was in the last quarter, with lead previously reporting to tails), the addition of a CIL precious metals circuit, mining of the high grade Pearse gold/silver deposit and accelerating underground development to open several mining areas in the Southern Ore Zone and enhance production flexibility.

The plant upgrades should allow extra value to be extracted from existing resources, and along with recent exploration success we believe there is now potential for at least a 10 year mine life.

At Sorby Hills, KBL has an advanced project with considerable scope for expansion. The current PFS is based on only 26% of resources, and there is the potential to develop this into a long life operation.

Website: www.psl.com.au

Company: Apollo Minerals Limited (ASX: AON)

Apollo Minerals (ASX: AON) will shortly embark on a high impact drill campaign targeting Iron Oxide Copper Gold (IOCG) deposits in the Gawler Craton in South Australia.
The company plans to drill several deeper diamond holes within the Mars Aurora Tank and Eagle Hawk JV’s to test for IOCG mineralisation.

Titan IOCG Project: A Potential Company Maker:

The Titan IOCG project, which consists of three JV’s, has the potential to be a company maker for AON.

It has all of the characteristics to potentially host an IOCG system.

It has 1) anomalous soil geochemistry up to 460ppm copper, 2) Iron rich haematite breccia 3) Nearby volcanic units and Hiltaba equivalent granites 4) Highly conductive zones with structural control 5) Gravity and magnetic responses similar in scale and magnitude to other world class IOCG deposits such as Prominent Hill located 110km to the east.

High Impact Drill Program; Significant Potential Upside:

AON are about to commence Phase 1 drilling to test several IOCG targets.

At the Mars Aurora Tank JV (AON earning 75%), AON will test a strong chargeability anomaly possibly associated with highly anomalous surface geochemistry.

At the Eagle Hawk JV (AON earning 75%), AON plans to test the large gravity anomaly at Bundi South and several other targets which are being identified through its recent gravity survey.

The cost of the Phase 1 drill program is expected to be $500,000 to $600,000, which would suggest circa 2,000 metres of drilling or eight holes based on an average depth of 250m.

AON has sufficient capital for further followup drilling.

HPX Strategic Alliance:

We see the attraction of Robert Friedland’s High Power Exploration Inc (HPX) to the Commonwealth Hill JV (earning up to 80%) as validation of concept that there is good potential to find a massive IOCG deposit(s) within the tenure.

We understand HPX chose to do a deal on the Commonwealth Hill project after the reviewing more than 1,500 projects worldwide.

HPX has used its proprietary EM/IP technology known as ‘Typhoon™’ to evaluate the JV tenements with several targets identified.

Four drill holes have been completed to test the geology of the region. Assay results are pending. Further exploration will be determined by HPX.

Strong Commercial Team:

The AON team is headed up by Dominic Tisdell (CEO) who is a mining engineer with significant experience, including time with Rio Tinto.

Richard Shemesian (executive chairman), a former investment banker, has significant experience in the resources sector with direct involvement in several company making projects.

Chris Anderson (technical advisor) is a geophysicist with over 35 years’ experience in Australia and abroad and was a key player in the Carrapatenna iron-oxide, copper, gold, uranium deposit discovery.

The AON team is complimented by HPX’s technical team including ex-Rio, head of exploration, Eric Finlayson (non-executive director) and Barry De Wet ex-BHP chief geophysicist.

Catalysts:

Late August: Phase 1 drilling commences at Mars Aurora Tank and Eagle Hawk JV.
September: Commonwealth Hill JV assay results.
September: Drill Results from Phase 1 Drill program.

Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.

The views, opinions or recommendations of this article do not in any way reflect the views, opinions, recommendations, of The Resources Roadhouse.

The Roadhouse makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions.