Kamara Group currently value PNX at A$0.058 per share

PNX Metals: A Robust Polymetallic Project

13:00 06 Dec 2016
PNX Metals (ASX PNX) has received coverage from the Kamara Group. The following is an extract from the report.http://www.*.com.au/thumbs/upload/News/Image/2016_12/757z468_pnx-metals_rig1-757.jpg
A Robust Polymetallic Project
We (Kamara Group) currently value PNX at A$0.058/share, based on a valuation of approximately A$34m, incorporating an appropriate discount for risk.
PNX are due to publish the results of a PFS for the Hayes Creek VMS project in the Northern Territory, Australia in 1H’17.
The Hayes Creek deposits remain open along strike and depth, with both proximal and distal gold mineralisation identified which could provide a boost to project economics.
Recent encouraging drilling results at Moline (7m @ 12g/t Au) has seen us add a modest amount to our valuation for exploration potential.
Further drilling results at the prospect, 65km from Hayes Creek, are due in coming weeks.
Preliminary capital of A$54m has been estimated for development of Hayes Creek, with expected low cash costs and production in 2019.

Key Points
Discovery Potential: The deposits are open along strike and at depth. Recent drilling at Mt Bonnie indicates additional open cut potential along strike.
Proximal gold mineralisation (such as Moline) may also prove a boost to the project, should exploration delineate a potentially mineable resource.
Metallurgy upside: PNX is examining the potential for increased recovery of all payable metals, including options for a Merrill Crowe circuit for gold/silver doré, base metal concentrates (Pb/Cu) and potential for sale of a bulk concentrate.
PNX recently reported (2Q’16) improved flotation recoveries of gold, silver and zinc at Mt Bonnie in comparison to Iron Blow.
Location: 170km south of Darwin and well positioned close to existing infrastructure including rail, road, high voltage powerlines, water, and Kirkland Lake’s gold mining operations (TSX: KL, formerly Newmarket/Crocodile Gold).

Valuation Summary
Our post-tax NPV is calculated at US$68.5m (A$91.3m). On a pre-tax basis, using an 8% discount rate, we obtain an NPV of A$120m.
Taking only 35% of the project valuation for risks relating to the pre-development PFS stage, we obtain a valuation of A$34.1m.
We have used flat, nominal costs and revenue based on recent spot pricing (29/11/16) LOM for most inputs for the DCF. Key differences in our model and the Scoping Study are minor and include:
- Addition of silver-offtake financing with associated royalty (net reduction in NPV).
- Assumed higher gold recovery at Mt Bonnie (70% vs 50% in scoping study).
- Use of spot pricing rather than consensus estimates (similar net pricing in revenue terms).
- We quote a post-tax NPV (rather than pre-tax) and use an 8% Weighted Average Cost of Capital (WACC) compared to 10% in the Scoping Study.
- We have taken out sustaining capital (mainly underground) from the operating costs, and added this item into ongoing capital requirements.

http://www.*.com.au/companies/news/170002/pnx-metals-a-robust-polymetallic-project-170002.html

PNX METALS LTD TIMELINE
NEWSWIRE
Thu
PNX METALS RAISING FUNDS FOR HIGH-GRADE GOLD AND MASSIVE SULPHIDES
Mon
PNX METALS HITS HIGH GRADE GOLD WITH FIRST HOLES AT MOLINE PROJECT
BIG PICTURE
November 28 2016
PNX METALS LTD HITS THICK MASSIVE SULPHIDES IN FIRST HOLES AT IRON BLOW
November 22 2016
PNX METALS LTD COMPLETES SALE OF LEIGH CREEK, ASSAYS EXPECTED
November 11 2016
PNX METALS LTD HITS THE EXPLORATION TRAIL IN KNOWN GOLD DISTRICT
November 03 2016
PNX METALS LTD DISCOVERS NEAR SURFACE EXTENSION TO MT BONNIE DEPOSIT
October 26 2016
PNX METALS LTD'S DRILLING SUCCESS DELIVERS SCALE POTENTIAL AT MT BONNIE
October 13 2016
PNX METALS DRILLING NEW HIGH PRIORITY CONDUCTORS, MT BONNIE ASSAYS IMMINENT
NEWSWIRE
May 11 2015
PHOENIX COPPER STARTS DRILLING AT MOUNT BONNIE