ferrets stock to watch: breakaway resources

Ferrets Stock to Watch: BREAKAWAY RESOURCE LIMITED
09:15, Friday, May 04, 2007

A COMPANY THAT HAS GONE LARGELY UNNOTICED AMONG EXPLORERS

Sydney - Friday - May 4: (RWE Aust Business News)
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OVERVIEW
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Breakaway Resources Ltd (ASX:BRW) aims to become one of
Australia's leading nickel and base metal resource companies.

It's a tall order considering the massive nickel projects
already developed and being developed at full pace in the mid-west of
Western Australia.

Shares of these nickel producers in WA are still surging ahead,
giving investors an inkling of the rewards in nickel and base metals
industry.

The action is now switching into Queensland, where Breakaway
Resources has advanced projects with existing nickel resources,
significant opportunities in base metals in northwest Queensland and
the likelihood of a longer-term royalty stream from production at
Eloise.

According to the investment broker, Lonsec, a future in the
nickel business basically comes down to the calibre of the people
involved, access to the "right rocks" and the ability to adequately
fund comprehensive and systematic exploration programs aimed at
discovery.

Lonsec believes BRW has the necessary ingredients to underpin
the development of a diversified mining house and initiates coverage
with an initial price target of 62c per share.

BRW remains largely unnoticed by Australian resource investors
and in Lonsec's opinion is an undervalued and well-funded junior nickel
(and base-metal) explorer with near-term development opportunities and an
unrivalled exploration portfolio containing multiple drill-ready company
making projects.

In August last year BRW completed the acquisition of a
portfolio of advanced Western Australian nickel sulphide exploration
projects from Lionore Mining International (ASX:LIM) to complement an
existing portfolio of nickel and base metal properties in Western
Australia and Queensland.

The assets acquired included five major nickel project areas in
the eastern goldfields and another in the East Kimberley.

Breakaway's portfolio of prospective mining regions cover:

The Eloise Regional Exploration project (100 per cent), located
some 70 kilometres southeast of Cloncurry in northwest Queensland.

The project covers over 300 square kilometres of tenements
surrounding the Eloise copper-gold mine which currently produces
approximately 70,000 tonnes of high-grade copper-gold concentrate per
annum.

The advanced Kambalda West nickel-gold project area located
approximately 20 kilometres south west of Kambalda in Western
Australia.

The Kambalda West project includes the historic Spargoville
nickel project (100 per cent), the Spargos Reward gold mine (100 per
cent) and the Yilmia tenements (80-100 per cent).

Miranda Nickel Exploration project located around the Agnew area
approximately 400 kilometres north of Kalgoorlie in Western Australia.

Breakaway holds 100 per cent of the base metal rights over an
area of 350 square kilometres of tenements in WA's major nickel province.

Projects include the Miranda North area covering the southern
portion of the Cosmos ultramafic belt and the Pinnacles Well area to the
south.

SHARE PRICE MOVEMENTS
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Shares of Breakaway yesterday rose 1.5c to 49.5c. Rolling high
for the year is 53.5c and low 25c. The company has 169 million shares
on issue with a market cap of $83.6 million.

Cash at end March is estimated at $21.6m (with no debt) and
is sufficient to underpin an active exploration initiative for the
remaining quarter of FY07 and then two full years through to the end of
FY09.

Lonsec estimates annual in ground expenditure of $7m-$8m in
activities ranging from the diamond drilling of advanced projects to
reconnaissance and orientation studies of unexplored areas.

BRW has been able to assemble a highly credentialed Board and
management team at a time when skills and experience is at a premium
in the resources sector following nearly five years of unprecedented
sector growth and prosperity.

The exploration team is managed by former senior members of LIM
who have a strong track record of exploration success in Australia
including several major nickel and gold discoveries (Emily Ann, Maggie
Hays, Waterloo, and Thunderbox).

Lonsec researchers point to BRW's multiple potential company
makers ready for immediate drill testing.

These include include Scotia Nickel prospect (eastern
goldfields), 5A nickel prospect (Kambalda West), and the metals prospect
(Eloise Regional Exploration in Queensland).

A number of near-term nickel production opportunities are
currently under evaluation.

Production potential from an existing resource base includes at
the Scotia project, the St Patrick's JORC compliant resource (0.135Mt @
3.7pc Ni or around 5,000t Ni metal) and remaining resources at the
Spargoville project (0.224Mt @ 2.0pc Ni or approximately 4,570t Ni
metal).

Although considered small in nature they can generate
significant free cashflow at current prices to augment exploration
funds, regain production experience and provide additional time to
locate and develop longer-life projects.

BACKGROUND
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Breakaway Resources Ltd is an exploration company based in Perth.

The company and its wholly owned subsidiaries, BMV Properties
Pty Ltd and Levuka Resources Pty Ltd, have a portfolio of advanced
resource development and exploration projects for copper, gold and nickel
in Queensland and Western Australia.

Breakaway has recently restructured its previous joint ventures
of several projects to now solely manage and operate the exploration
profile on its core projects.

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.