re: a dog of a stock

Even the top brokers got this so wrong!!
Now a "penny dreadful" at 19c two years+ on!!
Plenty of cash & little else!!
Capital return perhaps at 13c(cash value only)???

STOCK FOCUS:

21st August 2006

Conquest Mining (CQT) - Speculative Out Perform

Price: $0.39
12m Target: $0.50
MktCap(dil): $20. lm

Investment Data:
Share Price $0.39
Ord Shares 140.9m
Market Capitalisation $55.0m
200 Opt Dec 06 (listed) 75.2m
200 Opt Sep & Dec 07 (unlisted) 2.3m
Market Capitalisation (diluted) $85.2m
Net Cash (June 2006)* $17.lm
Enterprise Value $68.1m
52 week Low/High 3.50/510
* includes exercise of 2006 options
Directors:
Richard Krasnoff John Terpu Bruno Firriolo Joseph Radici
Chairman Managing Director Non-Exec Director Non-Exec Director
Major Shareholders:
Westpac Custodian Nominees 10.4%
John Terpu 5.3%
Resources:
Silver Hill: 3.8mt @ 1.8g/t Au, 82g/t Ag & 0.6% Cu Mt Carton: 1.5mt @ 1.4g/t Au, 70g/t Ag & 0.2% Cu Herbert Cr: 0.4mt @ 2.2g/t Au, 4g/t Ag Total: 5.7mt @ 1.7g/t Au, 73g/t Ag & 0.4% Cu
CQT - Share Price Graph
Gold & Silver Price (US$/oz)


Company Background
Conquest Mining (CQT) is a Western Australian based exploration company focusing predominately on its Mt Carlton Gold-Silver-Copper project located approx 100km east of Charters Towers in Northern Queensland (diagram 1). The Mt Carlton project is only a small part of the 4,200km2 of exploration leases CQT has amassed over the years in Northern Queensland.
The recent drilling results from the Silver Hill / V2 prospect (part of Mt Carlton) are in our opinion positioning the prospect as one of the most exciting mineral discoveries in recent times.
Silver Hill / V2 Prospect
CQT has reported some spectacular drill results from the Silver Hill / V2 prospect in what is shaping up as a major new poly-metallic discovery. The mineralisation is unlike any we have come across in Queensland with thick zones (+40m) containing high grade gold, silver and copper (we also believe zinc is present), as can be seen in the table below:
From To Interval Au Ag Cu AuEq*
Table 1. (m) (m) (m) fe/t) (g/t) (%) (g/t)
HC06RC-039 23 81 58 0.5 1,750 2.9 38.7
HC06RC-040 33 45 12 1.9 229 2.7 14.1
HC06RC-048 28 85 57 1.6 109 1.4 7.8
HC06RC-049 23 79 56 2.1 48 0.4 4.1
HC06RC-052 75 120 45 3.6 32 0.3 5.1
HC06RC-053 86 132 46 9.1 68 1.1 13.7
*AuEq (Au US$600/oz, Ag US$10/oz, & Cu US$6,000/t)
Initial indications are that the mineralisation is a 20m — 50m thick flat lying sheet of felsic volcanics, covered by 25m - 70m of over-burden. At this stage the mineralisation appears to be open in most directions, with holes 49, 52 and 53 drilled on the most easterly section, implying the mineralisation is likely to continue further to the east.
Drilling is ongoing with both RC and diamond rigs on site, diamond holes are currently twinning holes 39 and 53 to obtain a better understanding of the ore zone (results expected over the coming weeks), and to obtain metallurgical samples. RC drilling continues to step out from existing holes in an attempt to discovery the limits of the mineralisation.
Rough preliminary calculations indicate that the project has the potential to produce 120,000oz AuEq per annum utilising a l.Omtpa plant (55,000oz Au, 1.45moz Ag & 4,500t Cu) at a cash cost of A$400/oz AuEq. On a gold only basis and treating the silver and copper revenues as by-product credits, the cash cost becomes negative. Due to the complex mix of gold, silver, copper, and zinc, the metallurgical process will form a critical element of a feasibility study.
Investment Case
With the strong likelihood of further impressive drilling results and resource increases at Silver Hill we believe there is little risk purchasing CQT below $.40c, and believe that if the resource at Silver Hill can be doubled to 1.0m ounces AuEq over the coming months, a valuation closer to $.60c would be more appropriate.
We are forecasting a continuing rise in CQT's share price on the back of ongoing step-out exploration drilling and infill diamond drilling. We believe news flow should be fairly consistent going forward with drilling results announced at least monthly.