What the Analysts Say
WHAT THE ANALYSTS SAY: This week our team of experts run the ruler over Anatolia Energy and Xanadu Mines.
Website: www.breakawayresearch.com
Anatolia Energy (ASX: AEK)
Anatolia Energy is an ASX‐listed exploration company holding an extensive portfolio of uranium licences and advanced exploration and development projects in the Republic of Turkey.
In February 2015, Anatolia Energy completed a pre‐feasibility study on the Temrezli uranium project in Turkey which shows sufficient economic and technical viability to move to the next stage of development.
In early June 2015, Anatolia and Uranium Resources, Inc. (URI), a NASDAQ-listed company, announced a planned merger.
URI has been operating in the US uranium industry since the late 1970s and has two uranium operating licenses and two idled processing facilities in Texas, as well as extensive uranium landholdings and exploration databases in Texas and New Mexico.
The recently announced merger between Anatolia and URI provides enormous benefits to Anatolia shareholders.
The relocation of the Rosita plant from URI’s South Texas Operations is likely to save up to US$11 million in upfront capital costs.
While this may not appear to be large in absolute project capital costs, it represents more than 25 per cent of pre‐production capital costs.
Some modifications will need to be made to the existing plant, but URI’s Vice President South Texas Operations, who designed and oversaw construction of the Rosita plant, will be responsible for deconstruction, relocation and reconstruction of the plant at Temrezli in Turkey.
Following on from the latter, Anatolia shareholders will benefit enormously from URI’s technical operational experience in uranium.
URI has historically produced eight million pounds of uranium in Texas.
In addition to VP Dain McCoig (who joined URI in 2004), three plant superintendents each have experience ranging from 7 to 9 years, the manager of reservoir engineering has been with URI since 1987, the Logging Supervisor since 1990 with other personnel in reservoir engineering, radiation safety and HSE having 7 to 9 years with URI.
The ability of Anatolia to be able to draw on this wealth of experience, especially during development, commissioning and early production is invaluable.
Website: www. bellpotter.com.au
Xanadu Mines Ltd (ASX: XAM)
Longest intersection and highest grades from latest drilling
Recent drilling at Xanadu’s Kharmagtai gold-rich porphyry copper project in Mongolia has intersected the longest continuous zone of mineralisation and the highest grade mineralisation to date, showing that Xanadu’s increased understanding of the deposit is paying off at the drill bit.
The recent drilling reinforces the view that tourmaline breccia has strong potential to host large scale high-grade copper-gold mineralisation.
Intersections in tourmaline breccia included 415.2 metres at 0.63 per cent copper and 0.24 grams per tonne gold (0.79 per cent copper equivalent (CuEq)) from 88.8m down hole in KHDDH371 that contained 243.8m at 0.81 per cent copper and 0.32g/t gold (1.0 per cent CuEq) from 242.2m.
A high-grade core of breccia-hosted massive sulphide mineralisation was intersected in that hole with 50m grading 1.84 per cent copper and 0.73g/t gold (2.31 per cent CuEq) from 374m down hole included 27m at 2.55 per cent copper and 0.94g/t gold (3.15 per cent CuEq) from 384m down hole.
Hole KHDDH374, a 50m step-out from KHDDH371, intersected the longest continuous zone of copper-gold mineralisation so far at Kharmagtai of 593m at 0.45 per cent copper and 0.23g/t gold (0.6 per cent CuEq) from 68m.
Recent drilling success set to extend Kharmagtai Resource
The latest drilling results at Kharmagtai are set to significantly add to the Kharmagtai Resource (203Mt at 0.34 per cent copper and 0.33g/t gold (0.50 per cent CuEq) including a higher grade zone of 56Mt at 0.47 per cent copper and 0.59g/t gold (0.76 per cent CuEq)).
We anticipate that the total resource is now at least 240Mt at a grade of about 0.56 per cent CuEq.
Production cutbacks helping to revive copper price
Recently announced production cutbacks and curtailments are reducing copper output, leading to a reduction in copper stockpiles at terminal markets and improved copper prices.
While the short term oversupply has negatively impacted on the copper price, we continue to believe that the medium and longer term supply/demand fundamentals for copper are very positive and should support significantly higher prices.
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