Gryphon Minerals (GRY) Austock & Euroz Securities Speculative buys from both 12-month share price target of 70c (Austock) No price target from Euroz Last traded 42c
IT'S rare for a junior these days to snag any interest from the battered and bruised broking community, let alone two. But that's exactly what Perth-based Gryphon Minerals has managed to do, with both Austock and Euroz beginning coverage this month of the $37 million company. Gryphon, a gold/nickel junior with projects in West Africa and Western Australia, hasn't exactly been an outstanding performer on the bourse this year -- down 35 per cent. But both Austock and Euroz seem particularly interested in the company's Banfora gold project in Burkina Faso, which has a maiden resource of 410,000 ounces at 2.1 grams of gold per tonne. As Euroz analyst Andrew Clayton points out, 93 per cent of that is found within the top 100 metres and the mineralisation remains open in all directions. Austock puts it like this: "The Banfora project has proved attractive to both institutions and corporates and since listing Gryphon has raised around $15 million, largely through placements priced at a premium to the market, including a placement to Newmont Mining Corporation." The real buzz centres around Gryphon being able to define a 1million-plus resource at Banfora, while both brokers make mention of the good management team at Gryphon, which just happens to have African experience. On Austock's modelling, using a $US950/ounce gold price and US93c exchange rate for the Aussie dollar, Banfora is valued at $64 million. "We note that the project is highly leveraged to the gold price," Austock said."At base case $US675/ounce, Gryphon would be Net Present Value neutral. In the absence of sustained higher gold prices, Gryphon would need to find higher-grade ounces or continue expanding its resource base. Either of these seem reasonable possibilities." Euroz, on the other hand, reckons it is too early to formally value Banfora but should it discover the magical 1 million ounces, then a market capitalisation of $70-$80 million sounds reasonable. That would translate to a 80c a share.
GRY Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
