buy 2/current price: $6.35/price target: $9.06

Stock Reviews
Jubilee Mines NL (ASX Code : JBM) - Rating : Buy 2/Current Price : $6.35/Price Target : $9.06
JBM has announced promising nickel (Ni) intersections at the Sinclair Prospect at the 100% owned Bannockburn Project – approximately 100km-150km south of the flagship Cosmos operation (and quite separate from it). The intersections include 2.5m grading 2.6% Ni (from 160m) and 1.4m grading 2.3% Ni (from 107m) located on a conventional basalt-ultramafic contact. This is a good breakthrough as a green fields discovery and demonstrates that JBM’s proprietary EM geophysical techniques are working well in these terrains – but it is clearly “early days” and we prefer to see more intersections before regarding it as a substantial discovery. We note the tenor of the mineralisation, at 2%-3% Ni is significantly lower than that encountered at Cosmos. We have recently pulled back our JBM assessed value to $6.97/share to reflect the current weakness in the Ni market (we have pulled near term Ni price back to around US$5.90/lb - in line with UBS commodity commentary) and attribute weakness to a mixed outlook for the global steel industry which continues to be weak around the time of important negotiations to set iron ore prices between RIO/BHP and Japanese steel mills. We maintain our BUY 2 Recommendation with a 12 month target of $9.06/sh anticipating a recovery in the Ni prices in the next 12 months