intrepid wins best of breed

intrepid is socking away the cash- way undervalued --

Intrepid Wins Best Of Breed, But It Certainly Isn’t A Dog

By Our Man In Oz

“Best of breed” is a description normally heard in horse, cat or dog competitions. It can, however, also be applied in the mining sector, especially if the exploration results are in the eye-popping category such as the 627.2 metres of copper and gold mineralisation encountered by Intrepid Mines at its Tujuh Bukit project in Indonesia. It was that drill hit, plus follow up results, which prompted the stockbroking firm, ABN-AMRO Morgans to describe Intrepid in a March 30 research note as a “best of breed” stock with the potential for a “10-fold” share price re-rating. It hasn’t happened, of course. In fact, Intrepid has slipped back a few cents since Morgans got a little excited. But, rather than accuse anyone of premature exuberance Minesite’s Man in Oz decided to find out what it was that caused so much excitement.

The answer does not lie in a single, albeit spectacular, drill hole. It is found in the overall structure of Intrepid, a company emerging from years of wandering in the wilderness under different names and different management. In a previous life Intrepid was known as Taipan and its primary asset was the small, unloved, and misplaced Paulsens goldmine. Located in the heart of Australia’s Pilbara iron ore country Paulsens is a dead-set winner of a competition for forgotten Australian mines – though that is perhaps the first mistake when looking at Intrepid. A second would be looking too much at its history and overlooking the future.

There are three key assets driving Intrepid. Paulsens, Tujuh Bukit and a fresh management team. Paulsens is providing immediate cash flow. It is not a big mine, but it is very profitable, turning out around 80,000 ounces of gold a year at less than US $400 an ounce. Concern about a short life has been eased somewhat by recent drilling which has added to resource estimates and could help add a few more years to the operation. Tujuh Bukit is the big prize. It is a classic Indonesian-style discovery complete with a shallow, surface “cap”, of material containing at least 2.57 million ounces of gold, sitting atop a potential monster porphyry structure from which the 627.2 metre drill core was recovered.