60c price target recommendation

Any comment on this 60c price target by the AUSTRALIAN????


Intrepid Mines (IAU) ; ABN AMRO; Buy recommendation; Target price of 60c; Last traded at 23c

INTREPID Mines' flagship gold mine in Western Australia is expected to give the miner some upside now that the company is unhedged.

Its December quarter gold production from its Paulsens mine of 18,713 ounces sold at an average $US561/oz as the last 11,444oz of the company's hedging was delivered at $US421/oz.

In terms of Intrepid's mining operation, ABN AMRO anticipates 2009 will replicate 2008 in terms of throughput, grade and recovery.

The analysts add that Intrepid is well positioned to fund ongoing exploration at Tujuh Bukit in Indonesia, with 2.57moz of gold equivalent in a gold-silver cap essentially starting at grass, with potential for a major gold-copper porphyry underlying the cap.

"We expect the copper porphyry to prove to be a major resource, with a commensurately long and expensive exploration and development period, as opposed to the evaluation and development of the oxide cap, which has greater immediate potential," they said. "Longer term, we expect a substantial lift in value as the size and quality of the Tujuh Bukit resource is defined, and the 80 per cent interest in the project is valued by investors."

Intrepid is now fully exposed to gold-price fluctuations, but ABN AMRO says that more significant in the short term is its ability to fund a major resource development in the current debt and equity markets.