Mincor’s WA gold project expanding, says State One
14th July 2017
Resources Rising Stars
Mincor Resources (ASX: MCR) could be headed for a significant resource boost at its Widgiemooltha Gold Project in WA following recent drilling success, says Perth-based State One Stockbroking.
In an initiation report on the stock, State One analyst David Brennan said recent thick, shallow high-grade gold hits from drilling west of the 69,000oz Flinders prospect, part of the company’s 238,000oz Widgiemooltha Project, have highlighted the project’s significant growth potential.
The results from the new Flinders West discovery drove an 18 per cent jump in Mincor’s share price on the day of the announcement.
“We estimate that Flinders West (including extensions down strike) could increase the Widgiemooltha Project resource by 50-70,000oz (+30%),” he wrote.
“The strong growth potential underlines the value of Mincor’s decision to press ahead towards mine development.”
An April 2017 Feasibility Study confirmed the economic viability of mining 10 shallow open pits in series over an initial 19-month life, with ore treated via a tolling arrangement at one of many regional operating mills.
Mincor is targeting first gold production by the March 2018 quarter, although earlier production may be possible, subject to board and regulatory approvals.
Based on its strong cash position, plus its valuations for the company’s gold and currently mothballed but development-ready nickel assets, State One calculates Mincor’s equity value at 29 cents per share (compared with the current price of around 17 cents) – underpinning a target price of 31 cents per share.
“At current share price levels…we calculate that MCR offers significant upside potential; we maintain a Speculative Buy recommendation on this near-term gold producer and nickel option play,” State One wrote.
To view a copy of the State One report on Mincor Resources, click here.
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