broker value upgrade

Xceed Resources valued at more than double by broker on the back of Moabsvelden BFS
Thursday, April 12, 2012 by Proactive Investors
The completion of the Bankable Feasibility Study confirming the viability of the Moabsvelden Thermal Coal Project has earned Xceed Resources a price target of more than double its current share price and a speculative buy recommendation.

Xceed Resources (ASX: XCD) is the subject of a broker update following the release of its Bankable Feasibility Study earlier this week which has confirmed the economic viability of the Moabsvelden Thermal Coal Project in South Africa.

The following is a copy of the update.

Speculative Buy
(2.0X)
TARGET PRICE: A$0.30

BFS confirms viability of the Moabsvelden Thermal Coal Project:

Xceed Resources Ltd is a South African coal company focused on the development of the Moabsvelden Thermal Coal Project immediately east of Johannesburg, together with several other earlier stage exploration and development projects in the Witbank region.

Research Summary

Xceed Resources Ltd (XCD) has announced the completion of its 74% Moabsvelden bankable feasibility study (BFS), demonstrating that the project is both technically and economically viable. BBY retains a SPECULATIVE BUY recommendation with a target price A$0.30/sh and NPV of A$0.29/sh (down from A$0.30/sh).

Our variation is derived using revised assumptions, with changes including: reduction in production rates for export (industrial) and domestic thermal coal; reduction in export (industrial) coal prices to ZAR530/t (down from ZAR540/t); and reduced operating costs of ZAR107t (down from ZAR118/t).

Key catalysts include: (1) completion of the Moabsvelden Environmental Impact Assessment (FY12Q4), securing offtake contracts (FY13Q1) and financing (FY13Q3); and (2) completion of the maiden resource estimates and scoping studies at Roodepoort and Bankfontein thermal coal projects (XCD 70%) are expected later this year (which should ultimately provide further upside to our NPV