New Discovery at A1 - Magenta Zone extends at depth, looks like the "top" of a large mineralized (new style) system has been intersected. Comment : A1 has moved into bulk mining using mechanized equipment and the Magenta Zone is A MAJOR BULK MINING TARGET. Now mining Foley's North, which is a bulk target of 30,000 tonnes (December quarter ore). Air leg Miners continue to chase smaller, higher grade tonnages throughout the A1 mine. So far break down is 80,000 tonnes from bulk targets and 30,000 tonnes from high grade vein targets for a total of 110,000 tonnes.
Grade continues at 4-5 g/t gold.
Next drilling / development target is VICTORY NORTH which is on and immediately below current decline. Target is 50,000 - 70,000 tonnes 3.5 - 5.0 g/t gold. Now being drilled for production in March quarter.
Additional ore development at Black Reef of 7,000 - 8,000 tonnes and fresh ore coming from Union Hill Mine. Tonnage not advised.
Magenta Zone adds (IMHO) about 750,000 tonnes (and open at depth) 3.8 g/t gold. Published resource is 506,000 ozs + (IMHO) 75,000 ozs ( 80% of Magenta is outside current resource)for total of 581,000 ozs. At 25,000 ounces per year is 23 years of production from all sources. Targeting ASIC of A$1,000 per ounce for free cash flow of $12M. Valuation should approach (next 6-12 months) $12M x 8 = $96M or 8.5 times current price = 13.6 cents per share before dilution (new issue and options exercize).
Time to significantly expand processing capacity at Porcupine from cash flow.
CTL Price at posting:
1.6¢ Sentiment: Buy Disclosure: Held
