Ferrets Stock to Watch: INTREPID MINES LTD 09:02, Friday, 3 August 2007
A MINING EXPLORER LOOKING GOOD ON ALL FRONTS
Sydney - Friday - August 3: (RWE Aust Business News) ****************************************************
OVERVIEW ********
Intrepid Mines Ltd (ASX:IAU) attracted market attention this week after the company released its fourth-quarter report to June 30.
It disclosed that the Paulsens mine in the Ashburton region of WA has produced 15,800 oz gold at $US467/oz cost for the period.
This alerted a number of brokers including, Shaw Stockbroking, which believes the company is undervalued.
In addition the Casposo project disclosed high-grade results as well.
You might remember that Intrepid Mines was formerly Nustar Mining Corporation in its previous lifetime in mining exploration.
Intrepid has concentrated on the development of the Paulsens Deposit since knocking back an offer from Sedimentary Holdings back in 2005.
In the June quarter, Intrepid produced 15,854 ounces of gold at a total site production cash cost of $467 per ounce.
Total revenue for the quarter was $7.8 million. Cash balance at the period end was $1.1 million
Unit operating costs for the quarter rose from $83 to $93 per tonne of ore mined/processed equally as a result of the lower tonnes mined and the weaker US dollar against the Australian dollar (5.8 per cent or $5 of the increase).
Australian dollar unit operating costs are expected to return to normal levels in the September quarter.
While inherent grade variability will always exist at the Paulsens gold mine, improved understanding of the ore body combined with a tailored mining approach and transition to improved reserve delineated deeper sections of the ore body, are expected to deliver improved performance.
SHARE PRICE MOVEMENTS *********************
Shares of Intrepid yesterday edged up 2c to 44c. Rolling high for the year is $1.17 and low 41c. The company does not pay a dividend but has an earnings per share of 1.22c and a p/e ratio of 36.07. The company has 145.9 million shares on issue with a market cap of $64.2 million.
Progress on the company's projects cover:
A final feasibility report for the Casposo project was delivered to the company by AMEC (Peru) in March.
The highlights of the study include (in US dollars unless indicated), mineral resources (Indicated only): 2.2 million tonnes of ore containing 313,278 ounces gold and 8.2 million ounces silver, grading 4.46 g/t gold and 116 g/t silver.
Within this resource a mineral reserve has been developed of 1.8 million tonnes of ore containing 270,089 ounces of gold at 469 g/t and 6.5 million ounces of silver grading 114 g/t silver.
The first drill program since completion of the Casposo feasibility study was completed during the quarter.
The near-term goal for exploration at Casposo is to increase the life of mine proposed in the feasibility study by testing pit extension and underground vein targets.
A total of 3,315 metres of core drilling was completed in the program that concluded in May.
About 600 metres (in nine holes) were used specifically to support mine geotechnical design.
Of particular note are very strong values in intercepts obtained from drill hole CA-07-200, which intersected 7.00 metres of 9.02 g/t gold and 338 g/t silver at shallow depth along the proposed wall.
This additional near surface information will help determine pit design in the initial year of mining.
Drill holes CA-07-205 intersected 4.3 metres of 4.18 g/t gold and g/t silver from 116.2 metres to 120.5 metres and A-07-216 intersected three metres of 8.6 g/t gold and 579 g/t silver from 109.8 metres to 112.8 metres.
Both intercepts test down-dip extension of a new section of the Inca vein defined by drill holes CA-06-183, 184, 197 in September of 2006.
Cristina:
An exploration project 35 kilometres southeast of Kamila known as Cristina was explored during the past twelve months.
Exploration included trenching and rock and stream sediment sampling. A narrow mineralised structure several kilometres long was delineated containing gold and base metal values.
Management carried out a comprehensive review of all the results in the current quarter and decided that the project did not warrant diamond drilling, and the project was returned to the owner.
Total expenditures were approximately $125,000.
Australia exploration:
The company utilised exploration staff from its Central American operation to conduct a review of the Ashburton tenement package using their experience with Carlin style orebodies.
This review provided a different perspective for approaching future exploration in the area and some considerations noted align well with Newcrest exploration efforts in the region.
Recent exploration in Intrepid's Ashburton tenements has defined extensive areas of structurally controlled silicification and recciation with potential to host Carlin-style, sediment hosted, disseminated gold deposits.
These new targets can extend up to several kilometres along strike and can be up to 150 metres wide. Several areas have been recommended for further more detailed work.
Follow-up work will include detailed sampling and mapping of these exiting new targets.
Mexico exploration - Taviche:
Intrepid optioned the Taviche property located in Oaxaca State, Mexico in 2006 from Plata Panamericana SA de CV.
The Taviche property comprises two concessions totalling 13,724 hectares.
Subsequently in 2007, Intrepid entered into an agreement with Aura Silver Resources Inc whereby the companies will jointly earn a 70 per cent interest in the concessions.
Aura Silver will undertake to fund the first year agreement commitments with Plata Panamericana.
Intrepid acts as operator and began field activities in January.
Intrepid, together with partner Aura Silver, has initiated the permitting process for a proposed Phase 1 drilling program at Taviche totalling 3,800 metres planned to commence in the third quarter of 2007.
El Salvador Exploration:
Exploration at the company's San Cristobal project is pending a review during the quarter as the company reviews the results of drill programs conducted in the latter part of 2006 and environmental permit approval for drilling at its San Pedro concession.
The company is planning further exploration work at the Minitas project based on the positive results of drilling reported in 2006.
In the interim, the company continued its work with the community on local development projects.
At Potonico the company continues discussions with regulatory and government authorities and with the local community with a view to implementing its grassroots programs in the area.
Sweden - Jokkmok project:
This silver-lead-zinc project was funded by Roscan Minerals Inc which has spent at total of $600,000 in the last two seasons using Intrepid as the operator.
The exploration target is a Cannington style silver-lead-zinc deposit.
The 2007 program completed 1,116 metres of diamond drilling in eight drill holes.
A total of 401 samples were submitted for zinc, lead, silver analysis, as well as multi-element analysis.
A ground geophysical program consisting of HLEM Slingram and magnetic total field surveys was also completed to assist in delineating drill targets.
Anomalous lead and zinc values were intersected in the majority of drill holes.
However, drill results overall were not compelling. The purchase payment to the vendor was not justified in light of the exploration results and the property has been relinquished.
BACKGROUND **********
Intrepid Mines Ltd is an international gold and silver production, development and exploration company.
The company's producing property is the Paulsens gold mine, located near Ashburton in northwestern Australia.
Intrepid's advanced development property is the Casposo project located in San Juan Province, Argentina.
Its exploration properties are located in Argentina, El Salvador, Mexico, Australia and Canada.
Intrepid Mines was formed through the merger of Canadian-based Intrepid Minerals Corporation and Australian-based Nustar Mining Corporation Ltd in July 2006.
The new entity offered investors production and growth, delivers investors greater market presence; a broader shareholder base; technical and geographical diversification; and improved funding capacity.
At the time, Nustar subsequently took up dual listing on the Toronto Stock Exchange and changed its name to Intrepid Mines Ltd.
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