What the Analysts Say
WHAT THE ANALYSTS SAY: Interesting news and views from across the Resource Analyst universe.
Website: www.beerandco.com.au
Company: Pilbara Minerals (ASX: PLS)
Tabba Tabba is a small high-grade deposit with out-cropping mineralisation.
The processing plant is being constructed and PLS is fully funded to ship first product before the end of 2014.
PLS has an agreement to supply Global Advanced Metals (GAM) with concentrate for five years, at a secured price.
Pilgangoora is a much larger deposit with significant spodumene, which is now in demand for ceramics and cook-ware.
Beer & Co projects expenditure of about $23 million to bring it into production by mid-2017.
Tabba Tabba – high-grade tantalite
Tabba Tabba was mined artisanally in the 1950s and earlier.
It was previously owned by GAM which was seeking high-grade material to feed its plant at Wodgina.
PLS has been able to quote a Measured & Indicated Resource estimate based on GAM’s work, of 155,000 tonnes grading 1330ppm.
Processing by Nagrom, a world leader
PLS was invited to become a 50 per cent partner in Tabba Tabba by Nagrom, which is a privately owned metallurgical engineering company that has developed and operated many of the plants used to produce tantalite as well as spodumene, significantly reducing process risk.
Firm sales contract with Global Advanced Metals
GAM supplies high performance tantalum metallurgical and powder products to the electronics, aerospace, automotive, chemical manufacturing and other industries.
Tabba Tabba has executed a five year sales agreement at a fixed price, subject to CPI adjustment.
Tabba Tabba is developing a plant to process 120,000 tonnes per year of ore.
While this is a small volume, the present resources are less than two years of operation.
There is significant further mineralisation, though we do not know the grade.
Beer & Co’s risked valuation
In our analysis, Beer & Co estimates that the current market value of PLS is their 50 per cent share of Tabba Tabba resources.
Beer & Co sees significant value in the Pilgangoora resources as well as the potential for extensions to Tabba Tabba.
Website: www.breakawayresearch.com
Company: White Rock Minerals (ASX: WRM)
White Rock has already identified meaningful open pit-able gold and silver resources at its Mt Carrington project, however, the company is now set to test a highly prospective copper porphyry target at depth, below the identified gold-silver resources.
A $200,000 grant by the New South Wales government provides further confidence as to the calibre of the target and will supplement the $1 million budget already allocated by the company.
White Rock Minerals was recently awarded a $200,000 grant by the NSW government to assist with the exploration of a highly prospective copper porphyry target at the Mt Carrington project.
Previous drilling intersected significant widths of near surface copper mineralisation in quartz sulphide veins.
These veins are hosted by structures interpreted to control the margins of a potentially significant porphyry ore body at depth.
White Rock has allocated $1 million (plus the A$200,000 grant) to explore the porphyry target which will consist of deep penetrating geophysics and gravity surveys and a 4,500m drill program of 4-6 drill holes (reaching a maxim depth of 1,400m) to be carried out over the next 12 months.
A new copper discovery within the licence area would be a ‘game changer’ for the company.
White Rock also recently released an updated Scoping Study, designed to assess the viability of initially developing the two gold dominant, open pitable deposits of Strauss and Kylo within the Mt Carrington central Mining Leases.
The study has highlighted robust cashflow potential based on an initial 3.4 year operation processing 0.8 million tonnes per annum of ore for production of approx. 30,000oz of gold per annum.
The low CAPEX estimate of $20.6 million and an assumed average realised gold price of A$1400 per ounce support a pre-tax NPV10 of $15.5 million (8 cents per share).
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