Broker sees TSX move by PNG copper/moly explorer Marengo as a...

Broker sees TSX move by PNG copper/moly explorer Marengo as a reason to buy
Marengo Mining’s proposed move to dual listing on the TSX is seen as a positive as it would highlight its low market capitalisation compared with other similar TSX stocks.
Author: Ross Louthean
Posted: Tuesday , 02 Oct 2007

PERTH -

Australian companies operating at home and offshore are showing a stronger inclination to seek listing on the Toronto Stock Exchange rather than London's AIM market, and Marengo Mining Ltd may be joining that trail. Sydney stockbroker Shaw Stockbroking sees this as one reason to put a "speculative buy" tag on the company.

A research report on Marengo Mining, which holds the big Yandera copper-molybdenum project in Papua New Guinea, shows that the company's market capitalisation is significantly low, compared to four of five other Toronto Stock Exchange listed companies with similar projects elsewhere in the world.

Shaw Stockbroking said investors should look at the stock prior to a plan by the company to be listed on the TSX early next year.

The Shaw study showed Marengo had a market capitalisation of $US52 million and a resource of 660 Mt at a copper equivalent grade of 53% compared with Augusta Resources, Chariot Resources, Tyler Resources and Continental Minerals on the TSX which all had market capitalisations between two to almost six times greater, with some having marginally higher grades but equities of between 51% to 100%. Marengo owns 100% of Yandera
The study said while the Yandera project may not be considered "particularly robust" compared to many large and world class projects, the potential metal production at a production rate of 40 Mtpa is significant "and comparable to other major copper producers.

"The project may require a partner with deep pockets to fund development and, due to marginal economics, it will likely only go ahead with significant taxation incentives from the PNG Government" as well as clever mine planning and financial structuring including a favourable offtake agreement.

Mineweb understands that at this stage Marengo has resisted overtures from miners and offtake parties and managing director Les Emery has indicated there is a preference to control development of the mine which is near Madang.

Perth broker D.J. Carmichael recently reported that ongoing drilling by the company was targeting the higher grade portions of the deposit that takes in the Yandera Central porphyry system.

D.J. Carmichael said Marengo's recently completed Conceptual Mining Study (CMS) showed Yandera "has potential to become a significant producer based on a nominal 10 years mine life."

Meanwhile, Marengo's just released annual report reveals that the CMS embraces:

An open pit encompassing 406 Mt of ore to underpin an initial 10 years mining life.

A possible mining rate of 25 Mtpa for the first two years then lifting to 40 Mtpa.

Production of 112,000t and then 88,000t of contained copper for the first two years increasing in Y3 to 124,000 tpa. Production of 4,200t of contained molybdenum for the first two years then lifting to about 6,700 tpa from Y3.

Initial $US942 M capital cost with an additional $US198 M required for the ramp up to 40 Mtpa. Forecast cash operating costs of $US10.09/t (based on a $US0.75/lb price) for the first two years and then $US9.09/t ($US0.86/lb).

http://www.mineweb.net/mineweb/content/en/mineweb-junior-mining?oid=37730&sn=Detail

If you look at the ,

Augusta Resources, Chariot Resources, Tyler Resources and Continental Minerals on the TSX which all had market capitalisations between two to almost six times greater, with some having marginally higher grades but equities of between 51% to 100%. Marengo owns 100% of Yandera .

Only Augusta resources is left,the Chinese having taken over the others.


http://www.augustaresource.com/files/doc_presentations/Augusta%20Investor%20Presentation%20December%202012%20Web_v001_y533f8.pdf

So should MGO be around the .80 cent mark when we get some news, based on Augusta resource?

Raider

Ps

Is the economic upside in North America just a coincedence,with MGO now moving there?