from https://www.livewiremarkets.com/wir...f-of-takeover-fever-to-the-junior-gold-sector
by Barry Fitzgerald Sept 13
VENTUREX RESOURCES
For longer than is worth remembering, the market pretty much ignored Venturex (VRX) and its development ambitions for the Sulphur Springs zinc-copper project in the Pilbara.
It didn’t matter what the base metals markets were doing, or what the company was saying, the share price could not break out of its coma-like state.
Things have changed, as was reflected in yesterday’s 1c, or 6.25%, bounce to 17c (there has been a 1-for-15 share consolidation). It reflected two things.
First, there was the overnight recovery in base metals, so Venturex is now being seen as a way to play metal price moves, which is a big change for the stock.
More critically though was Wednesday’s news that its 19% shareholder Northern Star (NST) had taken time out from its $350m acquisition of the Pogo gold mine in Alaska to sign-off on a $2m loan which Venturex will use to complete its definitive feasibility study in to the Sulphur Springs development.
Repayable in cash or shares at NST’s election, the loan means Venturex can avoid a dilutive equity raising ahead of the release of the DFS, something most in the market are assuming will be a re-rating event.
Adding to the sense of momentum about Sulphur Springs after all these years has been the positive research notes that have been floating around after a recent field trip by analysts.
Canaccord’s Tim McCormack was one of those to visit. In a note released this week, he put a 50c price target on the stock.
“The site visit highlighted a development-ready project and while it has been decades since the initial discovery, we expect the pending DFS (due late SepQ'18) to articulate a sensible development plan, which balances open pit and underground mining at a scale that offers robust financial metrics at conservative metal prices,” McCormack said.
He estimates total capex for the project (including nine months pre-strip/capitalised mining) to be $160m and forecasts production of 34,000tpa zinc and 15,000tpa of copper over an initial mine life of seven years, with first production possible in the second half of FY 2020.
Those are meaningful numbers for a company with Venturex’s current market cap, which goes to why McCormack has the 50c price target on the stock.
“Venturex has recently appointed a debt advisor and with completion of the DFS imminent, we expect discussions with finance providers to accelerate in the DecQ'18,’’ McCormack said.
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