Broker snap: Impressive assay results from Kalahari
LONDON (SHARECAST) - Ambrian Capital, the house broker of uranium and copper mine developer Kalahari Minerals, has seized on the release of 'further exceptional chemical assay results' from the miner's Rossing South mineralised system to talk up the shares.
'These results continue to impress, but perhaps most material to the ultimate resource target is the encouraging spectrometer results from the Western Limb. This area of the deposit (in addition to the Zone 2 southern extension) remains outside the existing resource, and thus has the highest potential to increase the headline total resource figure to be released in 3Q10 [third quarter 2010] - the primary short-term price driver,' the broker states.
'Outside resource increases and 'windfall' potential for M&A, the subsidiary price driver will be the DFS [definitive feasibility study], scheduled for completion in 4Q10, and associated inputs (e.g, metallurgical work, mine plans and cost estimates), which may be released on a staggered basis ahead of the DFS,' Ambrian analyst Brock Salier added.
Ambrian recommends buying the shares and has a price target of 232p, though it expects progress towards the price target to be slow 'as the register matures from quick-return small-cap holders to larger, longer timeframe holders, as exemplified by the recent Itochu acquisition.'
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