being spruiked on Hot Copper now with a valuation of 68 cents.
Hope it is not the kiss of death
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Carbine Resources (ASX:CRB) has announced a significant resource upgrade at their Mount Morgan gold copper tailings re-treatment project in Queensland. This has seen the total resource grow by around 20% or 1.8Mt to 397,000oz Au (394,000oz Au indicated). The resource upgrade forms the basis for the Definitive Feasibility Study (DFS) which is due to be released during September 2016.
Given the significant by-product credit revenues (copper sulphate & pyrite), we believe thatwhen production commences at Mount Morgan next year, the operation will be one of the lowest cost gold projects in Australia(LOM AISC - A$522 / oz - TSI estimate). At today's gold price the operating margin would be more than $1,200 / oz.
The information in this email should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions.
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Analyst Comment:Since announcing key management changes earlier this year, Carbine has continued to work quietly behind the scenes, however are now on the verge of releasing the DFS for their Mount Morgan project next month. The recently announced resource upgrade, which will be central to the DFS, saw an improvement in terms of the size (extended mine life) as well as head grade, which should result in improved economic outputs for the DFS in comparison to the PFS.
Carbine also recently completed a heavily over-subscribed capital raising ($7m), which ensures the company has sufficient funds to complete the DFS, as well as introducing a number of prominent Australian financial institutions to strengthen Carbine’s share register.
Valuation: We have increased our valuation for Carbine to $0.50 / share. The key driver for the change to our valuation was an extension to our mine life (10yrs) along with a slight change to our head grade assumption. Both assumptions are in-line with the resource upgrade.
However given the upside exploration target (40Mt at 0.97g/t - 1.2Moz) as well as the change in the market’s appetite for gold equities since the release of the PFS, we also examined an increased throughput scenario (1.5Mtpa) which saw our valuation increase to $0.68 / share.
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The information contained in this message and any attachments may be privileged and confidential, and is intended for the exclusive use of the addressee. If you are not the addressee, any disclosure, reproduction, distribution, on-transmission, dissemination or use of the communication is strictly prohibited. Please be advised that, whilst attachments may have been checked for viruses, you should rely on your own virus-checking software and procedures.
The information contained in this email communication is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Adam Kiley (AR No. 458224) is an authorised representative of Intelligent Financial Markets Pty Ltd (AFSL No. 426359).
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