bell potter - speculative buy

Bell Potter have been following Dart for a while and just issued a speculative buy recommendation to their client base with a target price of $0.18 cents. A summary of the recommendation is contained below.

"Unicorn molybdenum resource doubles to 203Mt"

"Impressive 93% resource boost for Victorian moly project. Dart Mining NL (DTM) has delivered an impressive resource upgrade for its 100%-owned molybdenum-copper-silver porphyry project near Corryong in Victoria. DTM has increased the JORC resource estimate for Unicorn to 203Mt at 0.06% MoEq from 105Mt previously. At a cut off of 0.04% MoEq the total Mineral Resource contains 72,000t (159Mlb) of Mo, 98,000t (216 Mlb) of Cu and 19.4Moz of Ag in situ metal. Importantly, the resource upgrade demonstrated improved confidence in the project and +102Mt is now in the measured category (~80% of the pit shell). The very low strip (almost nil) and higher grade, near surface component of the resource (54Mt at 0.08% MoEq) bode well for proposed mining in 2016. We expect the Scoping Study in October could outline attractive economics for development."

"DTM could be in the lowest-cost quartile of producers with low cash operating costs of ~US$4-$4.50/lb. The near-surface measured component of the resource alone could support a 10 year mine life with resource upside at depth. The financing requirement is estimated in the order of $330m with a possible payback of ~3 years. Infrastructure advantages include access to power, water, sealed roads, community housing and existing logistics infrastructure to transport concentrate to smelters in Asia."

"We view the Unicorn project as one of the best molybdenum-focused developments in Australia. DTM is backed by an impressive management team. The upgraded JORC resource estimate has provided a better sense of scale of the Unicorn deposit and is a significant step towards production. We recommend Buy (Speculative) and maintain a target price of $0.18/sh. We will review this target after release of the Scoping Study in October, which should outline attractive economics for development."