canaccord genuity says bab target 22p or 35c

Bullabulling Gold: 'One of most promising’ opportunities on the market, says Canaccord Genuity

Mon 1:41 pm by Jamie Ashcroft Based on current resources the Bullabulling mine could produce over 200,000 ounces of gold each year.

Bullabulling Gold (LON:BGL, ASX:BAB) provides investors with one of the most promising development and exploration opportunities on the market, says Canaccord Genuity.

Analyst Tim Dudley says the recent merger between venture partners GGG Resources and Auzex has put all the attention back on the 3.4 million ounce Bullabulling Gold project in Western Australia

“The straight-forward project offers potential for a profitable, large scale, low grade, bulk tonnage operation,” Dudley said in a note.

He points out that at current levels Bullabulling is priced at a 60-80 per cent discount to its peers in the gold sector. And such a discount isn’t justified because of the project’s potential scale, relatively simple mining and low risk location.
Dual listed Bullabulling Gold is the result of a recent merger between venture partners GGG Resources and Auzex, both of which had a 50 per cent stake. And it is now being run by newly appointed managing director Brett Lambert, who joined last month.

Dudley reckons the re-launch of the company is likely to be a ‘key catalyst’ for a renewed market focus on company as well as increased confidence in the project.
Central to this is the group’s plan to establish a producing gold mine at Bullabulling by 2015.

“By advancing the Bullabulling Gold Project towards production in 2015, we expect the company to generate a number of opportunities for a re-rating,” he said.
Based on current resources the mine could produce over 200,000 ounces of gold each year. Though, Dudley points out that the resource base could be upgraded further in the meantime.
“Bullabulling is completing a planned pre-feasibility in 2012 and final bankable feasibility in mid 2013.

“Combined with a successful track record of delivering an eight-fold increase in the resource since acquiring the project in only May 2010, we anticipate that the ongoing exploration drilling is likely to continue to add ounces.”
Canaccord rate Bullabulling as a ‘buy’ targeting 22p a share – which implies over 60 per cent upside to the current share price of 13.38p.

http://www.proactiveinvestors.co.uk/companies/news/44286/bullabulling-gold-one-of-most-promising-opportunities-on-the-market-says-canaccord-genuity-44286.html