admiralty needs to get act into gear

Admiralty needs to get act into gear


WHAT THE BROKERS SAY: Kevin Andrusiak | May 12, 2008

Admiralty Resources (ADY)

Stock Resource

Hold recommendation

Target share price: 19.5c

Last traded: 19.5cTHERE is no question that Admiralty Resources' key assets should be of appeal to investors. They are the Santa Barbara joint venture iron ore project in Chile and the Ricon Salar lithium operation in Argentina. Yet as Stock Resource notes, Admiralty needs to get its act into gear sharply to avoid it quickly losing market favour. Of key concern, according to Stock Resource, is the lack of significant progress at Santa Barbara. "The company is basing its long-term strategic planning around the potential to support production of up to 10 million tonnes per annum of iron ore, but it needs to undertake substantial exploration, engineering and financing activities to advance staged development towards this target," Stock Resource told clients. "In addition it needs to achieve material improvement in its current operating performance in order to improve its credibility as a reliable producer." Admiralty's capital structure is also under fire after 20 per cent of its equity changed hands recently because of the Opes Prime fiasco.