MERRILL Lynch is anticipating a further ramp-up in the mineral resource at Murchison Metals' Jack Hills iron project, in Western Australia's Mid-West, after the company announced a 153 million tonne resource at the project last week.
Analysts said that while the Jack Hills resource comprised of Salle (now 105Mt) and Mt Matthew (now 48Mt), the company excluded the Mt Hale, northeast extensions and Brindle tenements in the latest resource estimate.
"We expect these areas to add significant additional resources," Merrill Lynch said.
Merrill Lynch also said Murchison Metals needs to define 400-500Mt to deliver on planned production and that while this was a big ask, "Jack Hills still looks as if it will be the best orebody in the Mid-West".
Merrill Lynch has slapped a Buy recommendation on Murchison Metals and a target price is set at $7.
Last week, Murchison Metals announced the Jack Hills mineral resource had increased from 97Mt to 153Mt and is now comprised of 69.6Mt direct shipping ore at 60.3% iron and 83.4Mt beneficiation feed at 42.3% iron.
Shares in Murchison Metals closed up 21c at $4.12.
MMX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
