interesting independant research report...

Interesting research report out yesterday from the Transocean Group on CVE.

"We see upside potential for Cove through strong forecast cashflows for Koivu (including 2 year payback, on a geared basis), and via encouraging results from the highly prospective Quartz Circle Project in WA".

The report summarises the key points as:

"•Acquisition of Koivu Titanium Project expected to transform Cove from explorer to producer and become an international supplier of high quality titanium pigment feedstock.

•BFS scheduled for completion Q2 2013 with construction forecast to commence in 2014

•Significant JORC resource of 68.7Mt @ 15% Ilmenite, supporting 20+ year mine life. Potential to expand the resource through drilling as current JORC compliant ore bodies remain open at depth.

•Company forecasts annual production of 250,000t and conservative EBITDA of US$27.5m. We forecast higher EBITDA of US$35m – US$40m.

•Recently signed LOI for a potential long-term off-take contract with Sachtleben Pigments, one of the world’s leading producers of titanium dioxide (TiO2), who will act as a partner during BFS. Off-take discussions for as much as 300,000 tpa once Cove confirms ability to deliver a suitable product.

•Global shortfall of Ilmenite expected to significantly increase through to 2020 per market leader TZMI

•Finland is an excellent mining development destination with low sovereign risk (AAA rating), high quality infrastructure and workforce, potential in-country off-take partners and a significantly lower labour cost base than Australia."

They have a current valuation on the company at 37c and a 12 month target of 62c.

Fair upside from here...ecciting times ahead IMO !