LEG going back up?, page-3

An Extract taken from Barry Fitzgerald's article today:

LEGENDTalking about leverage to the upside from a discovery being made, Legend Mining (LEG) did nicely in response to its nickel-copper discovery in the Fraser Range in WA, flagged here last week.Legend shares were 4.2c ahead of it going in to a trading halt ahead of Monday’s release of assay results from latest drilling at its Area D prospect.It is now an 8.5c stock, with the $100m addition to its market cap in response to the 14.9m intersection grading 1.07% nickel and 0.75% copper also prompting a more worthy name for the prospect – Mawson.A 2.1m high-grade intercept within the 14.9m sulphide zone returned 2.1m at 2.03% nickel and 1.34% copper. Both were within a 70m disseminated sulphide halo, which Legend reckons has all the hallmarks of a large mineralised system.Euroz had an 8c target price on Legend ahead of the discovery and has since increased its target price to 11c, saying that while a lot of work is required before Legend has a mine on its hands, Mawson has the ingredients to “provide the framework for the next significant deposit in the Fraser Range”.The great hope is that Mawson – owned 70% by Legend and 30% by Mark Creasy, a 27% Legend shareholder - shapes up into another Nova, the nickel-copper deposit discovered in 2012 by Sirius Resources.Sirius was a 6c stock at the time and was later taken over by Independence Group (IGO) – a 14.2 per cent Legend shareholder – in 2015 for $1.8 billion or $4.38 a share.But it is way too early to be making comparisons with Nova, where the discovery hole returned a narrower but higher-grade hit. And it is too early to say if Mawson could be a stand-alone operation or if it its ore will have to trucked 200km to Nova for treatment.Euroz ran through some numbers. It said that at current spot prices, a payable tonne of ore from the 15m of massive sulphides would yield $155/t at spot prices (and assumed IGO payability of 80% if treated at Nova).Trucking costs of 10c/t would add $20/T to total processing costs of $125/t, after which (and assuming current spot prices for by-product metals) about $60/t would be deducted as by-product credits.“This would represent an operating margin of $90/t for each tonne of ore mined. Therefore, even 1% nickel mine grades would be economically truckable, assuming similar consistency with the other metals assayed within the 15m massive zone,’’ Euroz said.“Again, we acknowledge that this is early days. However, it is clear that the academic exercise above does at least serve to highlight the materiality of today’s result,” Euroz said.A bunch of juniors active in the Fraser – and likely to get more active in response to Legend’s success at Mawson – will be cheering Legend on when it returns to the field next year for follow up drilling.They include Galileo Mining (GAL), where Creasy is a 31 per cent shareholder, Boadicea (BOA), Constellation (CR1), Fraser Range Metals (FRN) and Orion Minerals (ORN).