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Copper load of this: junior up 1000pc with a target price of 800pc more
Robin Bromby, Resources
July 04, 2006
SHARES in junior resources play Australian Mining Investments have shot through the 1000 per cent gain barrier in just seven weeks as evidence mounts that it might be sitting on a potential $17billion copper discovery in Queensland.
AMI shares sagged as low as 29c in May but hit $3.27 in intraday trade yesterday, although they finished up 23c at $2.93. The latest surge followed a second drilling report showing good copper grades and indications that the deposit is much bigger than first thought. The other factor that will be playing on investors' minds is that AMI could be a takeover target for Xstrata, which operates the world-class Ernest Henry mine just 40km away and is actively trying to build its copper inventory in Queensland.

The potential of the Rocklands deposit near Cloncurry, Queensland, has increased with AMI's latest announcement that it is more than halfway to its 100 million tonne resource - and that some holes have hit mineralisation up to 155m wide.

One broker will be putting out a report later this week describing the project as one of the most important mineral discoveries of the past 20 years. This report will put a target price of $25 a share on AMI, more than eight times its present market valuation.

Even though institutions are holding back, the bottom line is impressive according to the broker: AMI might be sitting on copper with a value of $US13 billion ($17.5 billion). And that's what they call in-situ value, before it has been mined and refined.

The stock take-off began in early June when AMI brought out its first announcement that gave an inkling it was on to something big in the copper-rich region around Cloncurry - very big, in fact.

Most of the action in AMI shares appears to be generated by smaller retail investors. A typical sample of 10 trades yesterday showed only three above $10,000, and the highest being $31,000.

If Rocklands delivers the goods, it will be a sweet victory for AMI's executive chairman Wayne McCrae, who back in the early 1990s lost the huge Century zinc deposit, now supporting the world's second-largest zinc mining operation and owned by Zinifex. Mr McCrae ran a junior called Diversified Mineral Resources which ended up losing control of Century after a long court battle with the then CRA (now Rio Tinto). CRA then sold Century to Pasminco, now reborn as Zinifex.

But, in the tradition of what goes around, comes around, AMI's potentially rich copper find was drilled back in 1992 by the same CRA.

But the major could not reach agreement with the owners of the tenements and walked away, with a small syndicate of local miners working one of the copper zones until 1994. Then Mr McCrae came into AMI and by 2003 the junior was on the scent of the copper potential.

Recent drilling at one zone at Rocklands has already resulted in an inferred resource of 59 million tonnes at the encouraging grade of 2.04 per cent copper.

There are more completed holes on which assays are awaited.

But AMI said yesterday that all these other holes had intersected visible mineralisation over widths from 60m to 155m.

The company is aiming at proving up a resource of more than 100 million tonnes at greater than 2 per cent copper, along with significant gold and cobalt by-products. The deposit is located within what is known as the Mt Isa Inlier, the geological structure that hosts the Mt Isa, Hilton, Ernest Henry, Century and Cannington metal deposits as well as substantial uranium plays now being drilled.

Universal Resources is developing the Roseby copper mine to the north while Aditya Birla owns the Mt Gordon copper mine further northwest.

AMI is planning a name change to CeDeco.